Who Cares About Development Outcomes? Market Failures and the Role of the Evaluation Function

Development agencies expend large amounts of money and manpower ostensibly to achieve development outcomes that improve living conditions in developing countries. If development agencies cared only about development outcomes and these were easily observable in a timely manner, development agencies w...

Full description

Bibliographic Details
Main Authors:	Moland Gaarder, Marie, Bartsch, Ulrich
Format:	Journal Article
Language:	en_US
Published:	Taylor and Francis 2015
Subjects:	market failure development outcomes evaluation function externalities principal-agent
Online Access:	http://hdl.handle.net/10986/21302

id	okr-10986-21302
recordtype	oai_dc
spelling	okr-10986-213022021-04-23T14:04:01Z Who Cares About Development Outcomes? Market Failures and the Role of the Evaluation Function Moland Gaarder, Marie Bartsch, Ulrich market failure development outcomes evaluation function externalities principal-agent Development agencies expend large amounts of money and manpower ostensibly to achieve development outcomes that improve living conditions in developing countries. If development agencies cared only about development outcomes and these were easily observable in a timely manner, development agencies would ‘buy’ the best outcomes they could get for their money. And if someone else could get it for them at a lower cost, they would transfer the funds to this other agency. Unfortunately, outcomes are not easily observable, they often take years to appear, and frequently the ‘shopper’ cares more about being seen shopping than about what ends up in the cart. So how do we go about creating a functioning market for development outcomes? What role can the evaluation function play in helping the process of internalizing development outcomes into the development agencies’ objective functions and thereby aligning incentives with the ultimate goal of improving lives? We present the development business through the lenses of the literature on externalities, principal–agent problems, and decision-making under uncertainty. We also present examples of solutions from multilateral and bilateral development institutions. 2015-01-20T20:37:45Z 2015-01-20T20:37:45Z 2014-12-22 Journal Article Journal of Development Effectiveness 1943-9342 http://hdl.handle.net/10986/21302 en_US CC BY-NC-ND 3.0 IGO http://creativecommons.org/licenses/by-nc-nd/3.0/igo World Bank Taylor and Francis Publications & Research :: Journal Article
repository_type	Digital Repository
institution_category	Foreign Institution
institution	Digital Repositories
building	World Bank Open Knowledge Repository
collection	World Bank
language	en_US
topic	market failure development outcomes evaluation function externalities principal-agent
spellingShingle	market failure development outcomes evaluation function externalities principal-agent Moland Gaarder, Marie Bartsch, Ulrich Who Cares About Development Outcomes? Market Failures and the Role of the Evaluation Function
description	Development agencies expend large amounts of money and manpower ostensibly to achieve development outcomes that improve living conditions in developing countries. If development agencies cared only about development outcomes and these were easily observable in a timely manner, development agencies would ‘buy’ the best outcomes they could get for their money. And if someone else could get it for them at a lower cost, they would transfer the funds to this other agency. Unfortunately, outcomes are not easily observable, they often take years to appear, and frequently the ‘shopper’ cares more about being seen shopping than about what ends up in the cart. So how do we go about creating a functioning market for development outcomes? What role can the evaluation function play in helping the process of internalizing development outcomes into the development agencies’ objective functions and thereby aligning incentives with the ultimate goal of improving lives? We present the development business through the lenses of the literature on externalities, principal–agent problems, and decision-making under uncertainty. We also present examples of solutions from multilateral and bilateral development institutions.
format	Journal Article
author	Moland Gaarder, Marie Bartsch, Ulrich
author_facet	Moland Gaarder, Marie Bartsch, Ulrich
author_sort	Moland Gaarder, Marie
title	Who Cares About Development Outcomes? Market Failures and the Role of the Evaluation Function
title_short	Who Cares About Development Outcomes? Market Failures and the Role of the Evaluation Function
title_full	Who Cares About Development Outcomes? Market Failures and the Role of the Evaluation Function
title_fullStr	Who Cares About Development Outcomes? Market Failures and the Role of the Evaluation Function
title_full_unstemmed	Who Cares About Development Outcomes? Market Failures and the Role of the Evaluation Function
title_sort	who cares about development outcomes? market failures and the role of the evaluation function
publisher	Taylor and Francis
publishDate	2015
url	http://hdl.handle.net/10986/21302
_version_	1764447875378446336

Who Cares About Development Outcomes? Market Failures and the Role of the Evaluation Function

Similar Items