We use a donor-provider-agent framework to study the delivery of developmental goods (i.e. aid, credit, technology transfer to poor). The need to provide incentives for the intermediate provider has been a key issue in the recent academic as well as non-academic discourses. We show that the use of high-powered incentives can lead to breakdown of communications between the provider and the agents. We study the interplay between incentives and communication failure in the presence of motivated providers who derive benefits from helping the disadvantaged.
|Bath Economics Research Working Papers
- developmental goods
- motivated provider