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The paper augments Holmstrom's (1982) team production model in the context of aid effectiveness. The analysis shows how donor proliferation leads to inefficient supply of aid in the recipient country because of the free-riding problem faced by the donors. The empirical findings support the theoretical prediction with regard to donor proliferation. However, this raises the question whether the current efforts in the international aid community with regard to donor coordination can in fact solve the aid proliferation problem.

Aid --- Aid effectiveness --- Aid projects --- Aid recipients --- Coastal and Marine Environment --- Development Assistance --- Development Economics and Aid Effectiveness --- Development issues --- Development policies --- Disability --- Economic growth --- Education --- Effectiveness of aid --- Environment --- Gender --- Gender and Health --- Global Development --- International aid --- Macroeconomics and Economic Growth --- Policy Research --- Policy Research Working Paper --- Population size --- Progress --- Recipient countries --- Recipient country --- Recipient government --- Recipient governments --- School Health --- Social Protections and Labor