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Given a) the recent increases in the volume of aid for scaling up health interventions, b) the introduction of new aid modalities, and c) the growing interest to move towards a more results-oriented approach to deliver aid, this research seeks to better understand the relationship between Government and donors by assessing: - The nature of the incentive structures embedded in the new aid mechanisms and how they are structured by the monitoring and compensation schemes (penalties and rewards); - The motives (objective functions) of the organisations and individuals and how those shed light on the behaviours of the parties in the aid environment in Uganda; - The appropriateness of thinking embedded in economics, particularly the agency theory framework when applied to understand the aid contract. This investigation made use of qualitative methods (interviews, participant observation and documentary analysis) and a case-study approach. Key findings were: - Monitoring capacity and ability to assess performance was weak; - There was a lack of high level commitment towards improvement of monitoring from Government and donors; - Performance assessment was based on a subjective system and presented inefficiencies, which allowed for the distortion of the compensation scheme as penalties and rewards failed to be applied by donors vis-ä-vis the Government; - There were inter- and intra-organisational conflicting goals. Comparing stated and revealed motives, I found that there was less commitment towards health systems development by Government and aid effectiveness by donors than asserted by the parties. This thesis contributes to knowledge by providing an in-depth understanding of the relationship between Government and donors in a country-specific setting. It shows that agency theory is a useful framework to analyse the motives of the parties as well as the incentive structures embedded in the aid contract (albeit with some limitations).
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