Creating a Market for Outcomes : Shopping for Solutions

This article suggests that interactions between development agencies and recipient governments are mostly about inputs deemed (but not known) to contribute to improvements in living standards in recipient countries, rather than outcomes. We argue that the development marketplace is beset by market i...

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Bibliographic Details
Main Authors:	Moland Gaarder, Marie, Bartsch, Ulrich
Format:	Journal Article
Language:	en_US
Published:	Taylor and Francis 2015
Subjects:	market failure principal-agent development outcomes evaluation function externalities
Online Access:	http://hdl.handle.net/10986/22693

id	okr-10986-22693
recordtype	oai_dc
spelling	okr-10986-226932021-04-23T14:04:10Z Creating a Market for Outcomes : Shopping for Solutions Moland Gaarder, Marie Bartsch, Ulrich market failure principal-agent development outcomes evaluation function externalities This article suggests that interactions between development agencies and recipient governments are mostly about inputs deemed (but not known) to contribute to improvements in living standards in recipient countries, rather than outcomes. We argue that the development marketplace is beset by market imperfections because of externalities, principal–agent problems and decision-making under uncertainty, which not only makes it difficult to achieve the right outcomes, but also takes away incentives to learn about outcomes. A fundamental rethink of responsibilities and accountabilities in the development business would make sure that development outcomes are traded in the development marketplace. It would put recipient countries in charge of contracting development agencies to provide these outcomes. Development agencies would commit to, and be held financially accountable for, outcomes, that is, real improvements in welfare indicators. We describe the role of the evaluation function in aligning incentives with the ultimate goal of improving lives, and provide examples of emerging solutions. 2015-09-28T15:32:39Z 2015-09-28T15:32:39Z 2015-07-13 Journal Article Journal of Development Effectiveness 1943-9342 http://hdl.handle.net/10986/22693 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 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 principal-agent development outcomes evaluation function externalities
spellingShingle	market failure principal-agent development outcomes evaluation function externalities Moland Gaarder, Marie Bartsch, Ulrich Creating a Market for Outcomes : Shopping for Solutions
description	This article suggests that interactions between development agencies and recipient governments are mostly about inputs deemed (but not known) to contribute to improvements in living standards in recipient countries, rather than outcomes. We argue that the development marketplace is beset by market imperfections because of externalities, principal–agent problems and decision-making under uncertainty, which not only makes it difficult to achieve the right outcomes, but also takes away incentives to learn about outcomes. A fundamental rethink of responsibilities and accountabilities in the development business would make sure that development outcomes are traded in the development marketplace. It would put recipient countries in charge of contracting development agencies to provide these outcomes. Development agencies would commit to, and be held financially accountable for, outcomes, that is, real improvements in welfare indicators. We describe the role of the evaluation function in aligning incentives with the ultimate goal of improving lives, and provide examples of emerging solutions.
format	Journal Article
author	Moland Gaarder, Marie Bartsch, Ulrich
author_facet	Moland Gaarder, Marie Bartsch, Ulrich
author_sort	Moland Gaarder, Marie
title	Creating a Market for Outcomes : Shopping for Solutions
title_short	Creating a Market for Outcomes : Shopping for Solutions
title_full	Creating a Market for Outcomes : Shopping for Solutions
title_fullStr	Creating a Market for Outcomes : Shopping for Solutions
title_full_unstemmed	Creating a Market for Outcomes : Shopping for Solutions
title_sort	creating a market for outcomes : shopping for solutions
publisher	Taylor and Francis
publishDate	2015
url	http://hdl.handle.net/10986/22693
_version_	1764451789192560640

Creating a Market for Outcomes : Shopping for Solutions

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