Hierarchy and Authority in a Dynamic Perspective: A Model Applied to Donor Financing of Ngo Proposals

23 Pages Posted: 28 Jan 2006  

Boriana Yontcheva

International Monetary Fund (IMF) - IMF Institute

Date Written: July 2003

Abstract

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.

Keywords: hierarchies, strategic delegation, development aid, NGOs, dynamic games, principal-agent issues

JEL Classification: C70, D23, D82, L23

Suggested Citation

Yontcheva, Boriana, Hierarchy and Authority in a Dynamic Perspective: A Model Applied to Donor Financing of Ngo Proposals (July 2003). IMF Working Paper, Vol. , pp. 1-23, 2003. Available at SSRN: https://ssrn.com/abstract=879233

Boriana Yontcheva (Contact Author)

International Monetary Fund (IMF) - IMF Institute ( email )

700 19 th Street NW
Washington, DC 20431
United States

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