The role of evaluation in foreign aid programmes

Chapter 2 examined the impact on aid performance of information asymmetries between principals and agents within an official aid agency. This chapter analyses the impact of information asymmetries between the aid agency, donors and taxpayers and aid services suppliers. Later on in the chapter, information asymmetries between the agency and its political principals will also be added. The main purpose of this chapter is to demonstrate how these information asymmetries explain some of the observed behavioural characteristics of aid organisations and how foreign aid performance is to a large extent determined by donor country domestic policy concerns, not only by policies in the recipient country.