The interaction of donors, contractors, and recipients in implementing aid for institutional reform

The efficiency of the mechanisms of foreign aid provision has rarely been the subject of analytical deliberation (Pietrobelli and Scarpa, 1992). This lacuna is mirrored in the real world of foreign aid provision. The byzantine bureaucratic structure of aid agencies, the weak economic incentives in aid contracts, and the imprecision of project evaluation seem inconsistent with the pursuit of economic efficiency in this vital, and very large, area of economic activity. To cite one example, there are no existing evaluation methods suitable for application to the dominant types of aid projects in the Tacis and Phare programs, institutional reform projects (Evaluation Unit, 1997a, p.7; Martens, 1998).