The Donor-Intermediary Interaction and the Decision-Making Process of Intermediaries for Development Assistance for Health
In the first part, three sequential games model the interaction between donor and intermediary, as important players in development cooperation, under different circumstances. The game structure highlights the interdependencies between asymmetric information, trust, institutions and reputation. In e...
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|In the first part, three sequential games model the interaction between donor and intermediary, as important players in development cooperation, under different circumstances. The game structure highlights the interdependencies between asymmetric information, trust, institutions and reputation. In each situation, the reputation mechanism has a different effect. The analysis reveals that the importance of reputation as feedback mechanism for the donor about the behavior of the intermediary is subject to the institutional setting and the relative power of each player. The game modeling allows understanding of the importance of reputation, how this mechanism is related to institutions, and under which conditions it is likely to work. The games also emphasize the importance of third parties as external sources of information in order to make reputation an effective mechanism.
In the second part, the decision-making process of bilateral donors as regards development assistance for health is analyzed. The Millennium Development Goals declared the reduction of child mortality, the improvement of maternal health and the fight of HIV/Aids, malaria and other diseases as major objectives on the international agenda. Against this background, the principal question is in how far the knowledge about poor health circumstances in a potential recipient country influences the decision-making. The results show that health indicators affect the selection and allocation decision, but to a different degree. The internationally established health objectives guide the aid policies of donors heterogeneously. Overall, many motives, including political and economic factors, drive the selection and allocation policies of the average donor as well as for the majority of bilateral donors. In summary, the decision-making process for health assistance of the average donor and of individual donors is multidimensional, rather than narrowly focused on recipient need as expressed by poor health indicators.