No.119 Outsourced Technical Cooperation Reconsidered: Agency Problems in the Support of Decentralized Public Service Delivery in Sierra Leone

Technical cooperation at the implementation stage is indispensable for translating the effects of fund flows by way of budgetary support into the actual delivery of public services on the ground. An increasing demand for the streamlining of development aid, however, dictates that donors should contract out technical cooperation to local technical assistants in the name of efficiency and ownership. Anecdotal evidence, however, suggests that outsourced technical cooperation tends to be ineffective due to the structured corruption embedded in the culture of the recipient countries. This paper tries to reveal the agency problems in aid implementation by qualitatively and quantitatively examining records and outputs of public financial management by local governments in Sierra Leone - a fragile and conflict-affected state with a dire need for improved public service delivery. Partial, if not definitive, evidence of the ineffectiveness of outsourced technical cooperation in comparison to directly administered technical cooperation has been found; this warrants further investigation.

Keywords: public service delivery, accountability, agency problem, moral hazard, technical cooperation, Sierra Leone