Does 'aid' itself create incentives that undermine sustainability? This is the provoking question underlying the present study, which explores how the incentives that arise in the system of development co-operation affect sustainable outcomes.
The contribution of the study is manifold: First of all, it introduces an institutional perspective on development and development co-operation that is partly novel to Sida and the rest of the 'aid' community. This perspective highlights the importance of incentives and increases our understanding of incentive problems within developing-country contexts as well as within the system of 'aid' itself. Secondly, the study provides a method and tools for institutional analysis and evaluation of the relationship between 'aid', incentives and sustainability. It illustrates theoretically how these tools can be used to analyse incentives within the complex system of 'aid', associated e.g. with 'donor recipient' negotiations and with different 'aid' modalities. Finally, the study applies the method empirically, by initiating an analysis and evaluation of the incentive structure and its causes within Sida and five Sida-supported projects in India and Zambia. The analysis is based on interviews of more than 175 persons within Sida and Sida supported activities and a thorough literature survey.
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