ABSTRACT
To be effective, in supporting the creation of effective host country governments, overseas aid must meet two criteria leading to sound design and implementation matching objectives. Programs and projects should be focused and scaled to specific outcomes; and the aid projects must be staffed and managed effectively consistent with national and sectoral objectives. Since many aid performance problems involve personnel issues, relations with local contractors, and unexpected events that occur during implementation, they are hard to correct with legislation, other than to decentralize more authority and responsibility to the project management level. Incentives are required by domestic officials and aid project designs to induce competitive institutions with checks and balances and separated powers. Official development assistance operates largely on the premise that governments can be induced to reform by civil society action. Direct leverage on regimes and states by donors is minimal, leaving the intermediary institutional layer as the main target of influence.
