Over the last twenty years, numerous international assistance programmes have aimed to provide support for reconstruction and assist the policy reform process in the Western Balkans. In this context, concerns have arisen that poor government policies and inadequate donor coordination have reduced the effectiveness of such assistance. The paper discusses the sources of policy success and policy failure of such international assistance programmes within a principal-agent framework that models the influence of misaligned objectives, differing incentive structures, asymmetric information and moral hazard facing the different actors in the institutional structure of assistance programmes. In this political economy approach the varying influences on multiple principals and agents are key determinants of the effectiveness of policy. The paper takes a sectoral view in examining assistance programmes in the vocational education sector, where large donor effort has been applied in the Western Balkans over the last decade to modernise and reform the education system. The specific focus is on secondary vocational education in Serbia. The paper identifies causes of policy failure in EU pre-accession assistance in this key policy area.
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