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Hierarchy and Authority in a Dynamic Perspective: A Model Applied to Donor Financing of NGO Proposals
Author:
Boriana Yontcheva null

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Series:
IMF Working Papers
Volume/Issue:
Volume 2003: Issue 157
Language:
English
Publication Date:
01 Jul 2003
DOI:
https://doi.org/10.5089/9781451857511.001
ISBN:
9781451857511
ISSN:
1018-5941
Pages:
22
Keywords:
WP; hierarchies; strategic delegation; development aid; NGOs; dynamic games; principal-agent issues; principal-agent relationship; agent's effort; agent's preference; agent's choice; agent's initiative; agent's expertise; effort of the agent; Nongovernmental organizations; Debt limits; Project loans; Eastern Europe
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IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.
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This paper presents a dynamic game of strategic delegation between a principal and an agent. The principal can choose between two organizational designs: a traditional hierarchy where she retains authority over the choice of projects to be implemented or a delegation where she allows her agent to select the project. The key objectives of this model are to identify the long-run determinants of the principal’s choice and verify the impact of the authority allocation on the agent’s effort levels and on the principal’s payoffs. We apply the model to the relationships between institutional donors and nongovernmental organizations.
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Cover IMF Working Papers
IMF Working Papers
ISSN:
1018-5941
Publisher:
International Monetary Fund