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Intermediation by aid agencies

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Author Info
Colin Rowat (University of Birmingham)
Paul Seabright (Id'EI, Toulouse)

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Abstract

This paper models aid agencies as financial intermediaries that do not make a financial return to depositors, since the depositors' concern is to transfer resources to investor-beneficiaries. This leads to a significant problem of verification of the agencies' activities. One solution to this problem is for an agency to employ altruistic workers at below-market wages: workers can monitor the agency's activity more closely than donors, and altruistic workers would not work at below- market rates unless the agency were genuinely transferring resources to beneficiaries. We consider conditions for this solution to be incentive compatible.

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Publisher Info
Paper provided by EconWPA in its series Industrial Organization with number 0412007.

Download reference. The following formats are available: HTML (with abstract), plain text (with abstract), BibTeX, RIS (EndNote, RefMan, ProCite), ReDIF
Length: 26 pages
Date of creation: 09 Dec 2004
Date of revision:
Handle: RePEc:wpa:wuwpio:0412007

Note: Type of Document - pdf; pages: 26. University of Birmingham, Department of Economics Working Paper, 04-22 (3 November 2004)
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Web page: http://129.3.20.41

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Related research
Keywords: signalling; non-profit; wage differential; donations; altruism; two-sided market;

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L - Industrial Organization

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Handy, Femida & Katz, Eliakim, 1998. "The Wage Differential between Nonprofit Institutions and Corporations: Getting More by Paying Less?," Journal of Comparative Economics, Elsevier, vol. 26(2), pages 246-261, June. [Downloadable!] (restricted)
  2. Timothy Besley & Maitreesh Ghatak, 2005. "Competition and Incentives with Motivated Agents," American Economic Review, American Economic Association, vol. 95(3), pages 616-636, June. [Downloadable!]
    Other versions:
  3. Reinikka, Ritva & Svensson, Jakob, 2004. "Working for God?," CEPR Discussion Papers 4214, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
  4. Patrick Francois, 2003. "Not-For-Profit Provision of Public Services," Economic Journal, Royal Economic Society, vol. 113(486), pages C53-C61, March. [Downloadable!] (restricted)
    Other versions:
  5. Glaeser, Edward L. & Shleifer, Andrei, 2001. "Not-for-profit entrepreneurs," Journal of Public Economics, Elsevier, vol. 81(1), pages 99-115, July. [Downloadable!] (restricted)
    Other versions:
  6. H. Naci Mocan & Erdal Tekin, 2003. "Nonprofit Sector and Part-Time Work: An Analysis of Employer-Employee Matched Data on Child Care Workers," The Review of Economics and Statistics, MIT Press, vol. 85(1), pages 38-50, 01. [Downloadable!] (restricted)
    Other versions:
  7. Christopher Ruhm & Carey Borkoski, 2000. "Compensation in the Nonprofit Sector," NBER Working Papers 7562, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  8. William Easterly, 2003. "Can Foreign Aid Buy Growth?," Journal of Economic Perspectives, American Economic Association, vol. 17(3), pages 23-48, Summer. [Downloadable!] (restricted)
  9. Armstrong, Mark & Rochet, Jean-Charles, 1999. "Multi-dimensional screening:: A user's guide," European Economic Review, Elsevier, vol. 43(4-6), pages 959-979, April. [Downloadable!] (restricted)
  10. Preston, Anne E, 1989. "The Nonprofit Worker in a For-Profit World," Journal of Labor Economics, University of Chicago Press, vol. 7(4), pages 438-63, October. [Downloadable!] (restricted)
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Aldashev, Gani & Verdier, Thierry, 2007. "NGO Competition and the Markets for Development Donations," CEPR Discussion Papers 6350, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
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