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What Determines Evaluation Outcomes? Evidence from Bi- and Multilateral Development Cooperation

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  • Michaelowa, Katharina
  • Borrmann, Axel
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    Abstract

    Donor agencies invest considerable financial and human resources to evaluate the outcome of their development activities. To derive institutional conditions conducive to an efficient use of these resources, we develop a multi-level principal-agent model focusing on the various interests of the different actors involved in the evaluation process. The model highlights two central problems: (i) the aid agencies? conflicting objectives of transparency and self-legitimization, and (ii) the potential collusion between the evaluator and the project manager. Empirical evidence for the World Bank and different German donor agencies reveals concrete institutional requirements for a reduced evaluation bias and increased transparency. --

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    Bibliographic Info

    Paper provided by Hamburg Institute of International Economics (HWWA) in its series HWWA Discussion Papers with number 310.

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    Date of creation: 2004
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    Handle: RePEc:zbw:hwwadp:26176

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    Web page: http://www.econstor.eu/handle/10419/20
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    Keywords: Development cooperation; evaluation; political economy;

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    1. Vaubel, Roland, 2003. "Principal-Agent-Probleme in internationalen Organisationen," HWWA Discussion Papers 219, Hamburg Institute of International Economics (HWWA).
    2. Kilby, Christopher, 2000. "Supervision and performance: the case of World Bank projects," Journal of Development Economics, Elsevier, Elsevier, vol. 62(1), pages 233-259, June.
    3. Dollar, David & Svensson, Jakob, 2000. "What Explains the Success or Failure of Structural Adjustment Programmes?," Economic Journal, Royal Economic Society, Royal Economic Society, vol. 110(466), pages 894-917, October.
    4. Deininger, Klaus & Squire, Lyn & Basu, Swati, 1998. "Does Economic Analysis Improve the Quality of Foreign Assistance?," World Bank Economic Review, World Bank Group, World Bank Group, vol. 12(3), pages 385-418, September.
    5. Robert Townsend, 1979. "Optimal contracts and competitive markets with costly state verification," Staff Report, Federal Reserve Bank of Minneapolis 45, Federal Reserve Bank of Minneapolis.
    6. William Easterly, 2002. "The cartel of good intentions: The problem of bureaucracy in foreign aid," Journal of Economic Policy Reform, Taylor & Francis Journals, Taylor & Francis Journals, vol. 5(4), pages 223-250.
    7. Mookherjee, Dilip & Png, Ivan, 1989. "Optimal Auditing, Insurance, and Redistribution," The Quarterly Journal of Economics, MIT Press, MIT Press, vol. 104(2), pages 399-415, May.
    8. Stefan Mann, 2000. "The Demand for Evaluation from a Public Choice Perspective," Vierteljahrshefte zur Wirtschaftsforschung / Quarterly Journal of Economic Research, DIW Berlin, German Institute for Economic Research, DIW Berlin, German Institute for Economic Research, vol. 69(3), pages 371-378.
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