We propose a repeated moral hazard model with full commitment and limited punishment to study the problem of aid allocation in environments characterized by asymmetric information. The donor (principal) finances a three-period development program and the elite of the recipient country (agent),...

This paper studies the sustainability of early childhood education centers established under a large-scale, donor-funded project in rural Indonesia. Analysis of quantitative and qualitative data shows that 86 percent of the centers continued to provide preschool services three years after...