Rather than asking what aid agencies should be doing, this article asks the question: "Why are there many and different aid organisations and not just one?". The article argues that the main role of aid agencies is to mediate between donors' and recipients' interests, or preferences, and that there would be no need for mediation when donor and recipient interests were fully convergent. The article aims to provide a cross-institutional perspective to explain the relative advantages and disadvantages of each type of agency within a single explanatory model.