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Revised version of a paper presented at the 6th Inter-University Graduate Student Conference at Cornell Law School, April 2010.


The distribution of development assistance for health in sub-Saharan Africa is the visible result of decisions made by donors and aid intermediaries. Aid intermediaries have become increasingly important as connecting link between donors and recipients. Their heterogeneous group comprises bilateral aid agencies, multilateral organizations, private foundations, public-private partnerships and international non-governmental organizations. Institutions, as rules of the aid game, constrain the actions of aid intermediaries and influence transaction costs and incentives for the organizations. The process of aid allocation is portrayed in two repeated sequential games with two players, the donor and the aid intermediary. Donors pursue an array of goals by donating financial resources, while aid intermediaries aim at securing funding in order to guarantee their organizational survival. Donors use indicators to assess the performance of an aid intermediary. Trustworthiness is a crucial factor prior to any experience. The strategic choice of the intermediary depends on the financial importance of the donor. A small-scale donor expects qualitative information about achievements, whereas a large-scale donor asks for quantitative results. The intermediary tries to ensure funding in the long-run without compromising its often charitable motives too much in the short-run. Although the aid intermediary decides the aid-financed health intervention, the donor has an indirect but powerful voice in the aid allocation process thanks to the importance of funding.

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Economic assistance, Developmental aid, Health, Sub-Saharan Africa, Aid intermediaries