Common wisdom as well as well-grounded analytical arguments suggest that stronger punishment of deviant behavior meted out by a principal typically prompts the agents to better conform with his objectives. Addressing the specific issue of donor-beneficiary relationships in the context of...

Policymakers have invested billions of dollars over the past two decades on projects which target poverty reduction by institutional mobilization of the poor. Unfortunately, evidence on the efficacy of such projects is few and far between; this is an outcome of the complexity of these projects.