The recent focus on impact evaluation within development economics has lead to increased pressure on aid agencies to provide "hard evidence", i.e. results from randomized controlled trials (RCTs), to motivate how they spend their money. In this paper I argue that even though RCTs can help us...

The last three decades have seen an important surge of the non-governmental sector in the provision of foreign aid. Using NGOs to deliver aid can be a solution to bypass corrupt authorities, avoiding that aid resources are captured by local elites. However NGOs may also act as surrogates for...

This paper contributes to literature on the process of reform in Latin America. We study political economy aspects and the policy making process of reforms in what we identify as the five critical steps through the "life cycle" of a policy reform: the Planning, Dialogue, Adoption,...

This work proposes to rely on the capital gains tax legislation to introduce transfers in merger control. Transfers are never used in merger regulation, however they can represent a relevant device to extract information on synergies. The implicit transfer collected thanks to the capital gains...

A growing literature analyzes revenue-maximizing contracts for situations in which agents can acquire private information before they decide whether to join the contract. It is conjectured that the results also apply to the more natural scenario where information can be acquired either before or...

How does renegotiation affect contracts between a principal and an agent subject to persistent private information and moral hazard? This paper introduces a concept of renegotiation-proofness, which adapts to stochastic games the concepts of weak renegotiation-proofness and internal consistency...

Should contract design induce an agent to conduct a precontractual investigation even though, in any case, the agent will become fully informed after the signing of the contract? This paper shows that imperfect investigations might be encouraged. The result stands in contrast to previous...

We study the problem of an investor that buys an equity stake in an entrepreneurial venture, under the assumption that the former cannot monitor the latter’s operations. The dynamics implied by the optimal incentive scheme is rich and quite different from that induced by other models of...

The possibility of treason by a close associate has been a nightmare of most dictators throughout history. Better informed viziers are also better able to discriminate among potential plotters, and this makes them more risky subordinates for the dictator. To avoid this, dictators – especially...

This paper extends and applies principal-agent theory to the performance of donor projects. There is variation in the degree of divergence between the interests of the donor (the principal) and the recipient government (the agent). Further, the effort expended on observation of the agent is a...