High-Powered Incentives and Communication Failure
This paper uses a donor-provider-agent framework to study the role of provider incentives for the delivery of developmental goods like aid, credit, or technology transfer to the poor. The paper considers a situation where credible communication by...
| Main Authors: | , |
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| Format: | Working Paper |
| Language: | English en_US |
| Published: |
World Bank, Washington, DC
2015
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/2015/06/24728266/high-powered-incentives-communication-failure http://hdl.handle.net/10986/22225 |
| Summary: | This paper uses a donor-provider-agent
framework to study the role of provider incentives for the
delivery of developmental goods like aid, credit, or
technology transfer to the poor. The paper considers a
situation where credible communication by the provider is
the key to successful delivery. The study shows that the use
of high-powered incentives can lead to breakdown of
communication between providers and agents, leading to
undesirable outcomes. The paper studies the interplay
between incentives and communication in the presence of
typical and motivated providers and finds that in certain
situations incentivization leads to worse outcomes. |
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