The paper compares different aid policy instruments and their effect on the target group. Starting from a situation where interest groups compete for the resources of the government, international financial institutions aim to change the policy outcome. They can either directly support one group...

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...