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Can the development industry learn lessons from how §the finance sector intermediates huge amounts of §capital (with great efficiency)? The theory of §financial intermediation is applied to SIDA. It is §found that the transaction cost and information §asymmetry aspect of the theory does not sufficiently §explain SIDA s role as an intermediary. Various §factors justifying deviations from the theory were §identified, though the sustainability of these §factors in providing continued justification was an §issue. Two aspects are suggested for inclusion in §SIDA s policy, extracting greater value from know-§how and research and development.
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