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World Bank-borrower relations and project supervision

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  • Kilby, C.

    (Tilburg University, School of Economics and Management)

Abstract

This paper explores the relevance of the principal-agent model for analyzing development projects using data from World Bank-funded projects. After demonstrating that World Bank loan agreements can be viewed as principal-agent contracts, the paper explores the importance of the agency problem in determining project performance. Predictions from an adversarial model contrast with those of a cooperative model. The importance of information in the adversarial model links World Bank supervision to project performance. Data support the relevance of the agency problem and the role of supervision as monitoring. The paper concludes with suggestions for modifying project selection and implementation to reduce agency problems.
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Suggested Citation

  • Kilby, C., 1994. "World Bank-borrower relations and project supervision," Other publications TiSEM 86924339-a118-411b-8904-f, Tilburg University, School of Economics and Management.
  • Handle: RePEc:tiu:tiutis:86924339-a118-411b-8904-fa203617ff66
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    References listed on IDEAS

    as
    1. David Dollar & Craig Burnside, 2000. "Aid, Policies, and Growth," American Economic Review, American Economic Association, vol. 90(4), pages 847-868, September.
    2. de Bijl, P.W.J., 1994. "Delegation of responsibility in organizations," Discussion Paper 1994-69, Tilburg University, Center for Economic Research.
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    Cited by:

    1. Axel Dreher & Stephan Klasen & James Raymond Vreeland & Eric Werker, 2013. "The Costs of Favoritism: Is Politically Driven Aid Less Effective?," Economic Development and Cultural Change, University of Chicago Press, vol. 62(1), pages 157-191.
    2. repec:got:cegedp:97 is not listed on IDEAS

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