The Economist reports about cash-on-delivery schemes in development aid. Payments are made only after jointly agreed objectives have been met. The means to achieve those goals are left for the recipient country to choose—management by objectives.
True, potentially corrupt or negligent country officials can be monitored less tightly than with other schemes. But evidence discussed in the article suggests that such monitoring might not be very fruitful anyway. Moreover, sufficiently well specified objectives should in principle help to curb moral hazard and thus, reap the benefits of subsidiarity.
“Wie kann die Wettbewerbsfähigkeit Europas wieder hergestellt werden?,” ifo Schnelldienst 4/2015, February 26, 2015. PDF.
- “More Europe” to address important cross-border external effects or public goods—but not otherwise.
- Subsidiarity and fiscal equivalence.
- European institutions as guardians of the rule of law, economic freedom and consumer rights.
Finanz und Wirtschaft, September 8, 2012. PDF. Ökonomenstimme, September 10, 2012. HTML.
- Policy makers confuse debt and financial crises with a currency crisis.
- Different crises call for different policy responses. Many of those lie in the national policy domain, not the supra national one.
- Shifting too much policy responsibility, too quickly to the European level sows the seeds of new problems.