GENERAL ISSUES

The underlying theme that runs through this book is that agents involved in the delivery of foreign aid are likely to have a variety of motives and objectives that may well be very different from the publicly announced objectives of foreign aid programmes and organisations, for example, the alleviation of poverty in foreign countries. There are no doubt donors and taxpayers with genuine motives to transfer part of their wealth to alleviate poverty in foreign countries, as well as aid workers who are genuinely devoted to pursue this objective in their work and careers. However, agents involved in aid delivery may have other motives as well. Politicians in donor and recipient countries may want to use these funds to maximise their chances of being re-elected; civil servants in aid agencies and recipient organisations may seek to advance their own careers; commercial aid services contractors endeavour to maximise profits. As donors and taxpayers are not really in a position to implement these wealth transfers themselves, and potential beneficiaries are usually not in a position to mobilise the transfers on their own, delegation of tasks to agents in aid organisations is unavoidable but also carries the risk of deviation from the original objectives. This book has applied standard principal–agent theory to analyse these risks. It examines the institutional design of aid organisations and aid delivery processes and shows how different designs may favour different types of motives and thereby affect the outcomes of the delivery process.