price taking equilibrium in economies with multiple memberships in clubs and unbounded club sizes abstract we model an economy with clubs or jurisdictions where individuals may belong to multiple clubs and where clubs sizes are arbitrary clubs may be restricted to consist of only one or two persons or as large as the entire economy or anything in between notions of price taking equilibrium and the core both with communication costs are introduced these notions take into account that there is a small communication cost of deviating from a given outcome we demonstrate that given communication costs for all sufficiently large economies the core is nonempty and the set of price taking equilibrium outcomes is equivalent to the core

epsilon cores of games with limited side payments nonemptiness and equal treatment we introduce the concept of a parameterized collection of games with limited side payments ruling out large transfers of utility and demonstrate conditions ensuring that a game with limited side payments has a nonempty e core our main result is that when some degree of side paymentness within nearly effective small groups is assumed and large transfers are prohibited then all payoffs in the e core treat similar players similarly a bound on the distance between e core payoffs of any two similar players is given in terms of the parameters describing the game these results add to the literature showing that games with many players and small effective groups have the properties of competitive markets journal of economic literature classification numbers c71 c78 d71

non nested models of australia s overseas aid program after briefly surveying the existing on overseas aid motivations some empirical results are presented for australian bilateral aid in terms of the two competing theories in the aid literature namely the recipient need model and the donor interest model the empirical results for austrlia are atypical in that there is support for both hypotheses this is contrast to the results of previous studies of large nation states the united states britain germany france and japan which have found support for the donor interst model but not the recipient need model given that the empirical results reported here are consistent with both models this paper then proceeds to apply the relatively new tests of non nested hypotheses to the models the results indicate that australia s aid program has both recipient need and donor interest concerns i some years the recipient need motive dominates and in other years donor interest dominates

foreign aid an instrument for fighting communism abstract in this paper we test the argument that the sizeable reduction in aggregate aid levels in the 1990s was due to the end of the cold war we test two different models using a dynamic econometric specification on a panel of 17 donor countries spanning the years 1970 97 we find aid to be positively related to military expenditures in the former eastern bloc during the cold war but not in the 1990s suggesting that the reductions in aid disbursements are driven by the disappearance of an important motive for aid we also study the effect on aid allocation but here we do not find any robust effects of the end of the cold war

motivations for aid to developing countries abstract this paper attempts to identify the underlying principles of aid allocation and particularly the balance of motivations as between the needs of recipient countries and the interests of donor countries two alternative models are fitted by cross country regressions to bilateral and multilateral aid flows to some 80 developing countries in 1969 1970 and 1978 1980 the first recipient need model assumes that all aid is given to compensate for shortfalls in domestic resources this model provides a reasonable explanation for the distribution of multilateral aid but it is clearly not applicable for bilateral aid flows the second donor interest model assumes that all aid serves only donor interests defined to cover political security investment and trade interests this model gives generally good explanations of bilateral aid but is a poor fit for multilateral aid the relative importance of the various donor interests differs sharply among donors the paper ends with an analysis of the shift in the balance of aid over the 1970s towards the recipient need element and with a reference to the sharp change in policy in the 1980s towards increasing emphasis on donor interest aid

coding error or statistical embellishment the political economy of reporting climate aid to benefit from a wide spread public support for climate policy aid agencies strive to show the climate relevance of their development activities using project level aid data and country level political data for 21 dac donors from 1995 to 2007 we test whether this may lead to politically motivated misreporting through keyword search in individual project descriptions and complementary hand coding we assess all aid activities for their actual climate change related content and thereby construct our most relevant control variables econometric results reveal that indeed project coding is influenced systematically by the donor governments ideological orientation as well as by national voters environmental preferences

migration and foreign aid when it comes to linkages between migration and the global allocation of foreign development assistance the size of the immigrant population from a recipient country residing in a donor country is an important determinant of dyadic aid commitments two complementary hypotheses probe this relationship first donors use foreign aid to achieve their broader immigration goals targeting migrant sending areas to increase development and decrease the demand for entry into the donor country second migrants already residing in the donor country mobilize to lobby for additional aid for their homeland empirical tests on a large sample of country pairs made up of twenty two donors and more than 150 recipients over the period 1993 to 2008 show robust support for these hypotheses

can the new forms of investment substitute for the old forms a transaction costs perspective this paper uses transaction costs theory is used to explain the features of the new contractual alternatives to foreign direct investment the new forms to assess their efficiency and to forecast their future development

international technology transfer in services this study examines the nature of technology and the process of its transfer in five service industries from parent companies to foreign affiliates three principal research questions are posed what is the key technology in each industry what are the main methods for transferring this technology how and why do technology and transfer methods differ across firms industries and countries the empirical analysis shows that key technologies were generally knowledge of experience in the industry and methodology for producing the service transfer of the technology was mainly done through the training and transfer of experts and organizational forms were wholly owned subsidiaries and international partnerships more technology transfer occurred when firms were more international when affiliates were more recently established and when parent ownership was lower in the affiliate some evidence exists that more firm specific jointly produced technology leads to higher ownership percentage and greater transfer to affiliates

choosing to target what types of countries get different types of world bank projects well governed countries are more likely to make use of foreign aid for the purposes of economic development and poverty alleviation therefore if aid agencies are providing funds for the sake of development these countries should receive more aid and categorically different types of aid as compared with poorly governed countries in poorly governed countries aid should be given in forms that allow for less discretion using an original data set of all world bank projects from 1996 to 2002 the author distinguishes programmatic projects from investment projects and national from subnational investment projects if the world bank allows more discretion in well governed countries then it will choose to provide programmatic and national aid for these recipients the author presents evidence that the world bank provides a larger proportion of national investment lending in better governed countries with regard to programmatic lending he finds mixed evidence among counties eligible for international development association ida aid good governance surprisingly is associated with a lower proportion of programmatic aid whereas for international bank for reconstruction and development ibrd borrowers good governance is associated with a higher proportion the author subjects these results to a number of robustness checks although he confirms the existing result in the literature that the world bank provides larger overall amounts of aid to better governed countries his examination of the disaggregated data leads to questioning whether both lending wings of the world bank are designing aid programs in the most prodevelopment way possible

are bilateral and multilateral aid for trade complementary using the first comprehensive estimates of ad valorem tariff equivalent bilateral trade costs spanning the time period 2002 10 we examine whether the aid for trade aft inflows reduce bilateral trade costs facing aid recipients if so we ask whether the trade costs reduction effects of aft from bilateral and multilateral sources are complementary by showing the extent to which the observed trade cost reduction effects of aft from bilateral multilateral sources correlate with the magnitudes of aft disbursements from multilateral bilateral sources we present plausible explanation for the cross country variations in the extent to which aft promotes trade flows our findings have thus important policy implications for shaping future discourses on the coordination of disbursements for enhancing the effectiveness of aft

the determinants of the geographical allocation of ec aid to the developing countries this paper examines the economic rationale of the ec s aid policy towards the ldcs a multiple linear regression is conducted on the ecs flows of aid to 62 ldcs during the 1975 80 period using two alternative models one trying to explain the ecs pattern of geographical allocation of aid using variables that assess the needs of the recipients and another using variables that asseses the interests of the ec the results show that the ec multilateral aid to the ldcs is more motivated by the needs of the recipients in terms of their current account balance of payments and their state of basic human needs as these are assessed by the physical quality of life index pqli an important consideration however is also given to community export interests and to a tendency not to allocate aid to security sensitive countries it is also demonstrated that in the second half of the 1970s an emphasis persited on francophone ldcs by comparison bilateral aid distributed by the ec member states has been motivated to a

samaritan agents on the strategic delegation of aid policy abstract should a donor delegate the responsibility for allocating its aid budget to a less inequality averse agent to alleviate the consequences of the samaritan s dilemma it is facing i show that when aid impact differs across recipients the optimal type of agent depends on whether or not committing to a greater share for countries where the productivity of aid is low raises the combined domestic incomes of recipients this is the case for donors too concerned with efficiency ex post they therefore delegate the decision on the discretionary aid allocation rule to agents more sensitive to distributional issues than themselves

walrasian analysis via two player games abstract we associate to any pure exchange economy a game with only two players regardless of the number of consumers in this two player game each player represents a different role of the society formed by all the individuals in the economy player 1 selects feasible allocations trying to make pareto improvements player 2 chooses an alternative from the wider range of allocations that are feasible in the sense of aubin the set of nash equilibria of our game is non empty and our main result provides a characterization of walrasian equilibria allocations as strong nash equilibria of the associated society game

estimating aid allocation criteria with panel data in 1990 the net amount of economic aid or official development assistance to all recipients from all multilateral and bilateral sources was about 62 billion an amount that exceeded the gdps of greece and portugal despite the size of this yearly transfer there has been no rigors modeling and estimation of the criteria by which it occurs as a result there is little agreement about the extent to which oda is allocated according to the needs of the recipient countries the purpose of this paper is to develop a rigorous theoretical model of oda allocation that can be used to provide consistent estimates of the importance of recipient needs copyright 1994 by royal economic society

behavioral conformity in games with many players in the literature of psychology and economics it is frequently observed that individuals tend to conform in their behavior to that of similar individuals a fundamental question is whether the outcome of such conformity can be consistent with self interest we propose that this consistency requires the existence of a nash or approximate nash equilibrium that induces a partition of the player set into relatively few societies each consisting of similar individuals playing similar strategies in this paper we characterize a family of games admitting the existence of such equilibrium we also introduce the concept of crowding types into our description of players and distinguish between the crowding type of a player those characteristics of a player that have direct effects on others and his tastes with assumptions of within crowding type anonymity and linearity of taste types we show that the number of societies can be uniformly bounded

equivalence of games and markets the author proves an equivalence between large games with effective small groups of players and games generated by markets small groups are effective if all or almost all gains to collective activities can be achieved by groups bounded in size a market is an exchange economy where all participants have concave quasi linear payoff functions the market approximating a game is socially homogeneous all participants have the same monotonic nondecreasing and 1 homogeneous payoff function our results imply that any market more generally any economy with effective small groups can be approximated by a socially homogeneous market

competition for aid and trade policy this paper considers the optimal allocation of a given amount of foreign aid between two recipient countries it is shown that given consumer preferences a country following a more restrictive trade policy would receive a smaller share of the aid if the donor country maximises its own welfare in allocating aid if on the other hand the donor country allocates aid in order to maximize the sum of the welfare of the two recipient countries the result is just the opposite finally we analyze the situation where the recipient countries compete with each other for the given amount of aid it is shown that this competition tends to lower the level of optimal tariffs in the recipient countries

the fungibility of us assistance to developing countries and the impact on recipient expanditures a case study of pakistan abstract development assistance continues to be an important source of funds to developing nations donor countries prefer to provide categorical or project aid since it is believed that the typing of aid to a specific project will help to ensure that the funds are used in accordance with the designated objectives development literature indicates however that the ability to tie aid may be illusory specifically recipient nations can cut the ties associated with categorical aid and effectively transform it into purely income augmenting funds i e purely fungible resources the funds legally designated for specific developmental purposes may finance projects whose purposes are not in line with the developmental objective the fungibility of development assistance has received little empirical attention this paper is an effort to fill that gap we formulate an econometric model that explains the response of pakistan s spending for defense public nondefense and private consumption to us assistance within the fungibility framework our results suggest that us assistance to pakistan whether military or nonmilitary is fully transformed into fungible resources with impact on public spending less significant than expected

foreign aid domestic investment and welfare this paper examines the welfare implications of temporary foreign aid in a simple two period two country model of trade domestic investment is endogenous providing an important link between aid in period one and the terms of trade in periods one and two transfer induced changes in the terms of trade redistribute present and future income between the donor and the recipient in the presence of barriers to international borrowing and lending such redistribution gives rise to the possibility of temporary aid being both potentially and strictly pareto improving

large games fair and stable outcomes abstract we establish that for a broad class of large games with sidepayments fair out comes are nearly stable more precisely the shapley value of a large game is in the e core and e is very small if the game is very large the proof uses two other results of independent interest for large games the power of improvement is concentrated in small coalitions and the shapley value of a small syndicate acting together is nearly the sum of the shapley values which accrue to the members acting alone

aid and debt relief in africa have they been substitutes or complements summary much attention has been paid to helping economies in sub saharan africa ssa to achieve the millennium development goals mdgs the conventional instruments for providing assistance have been foreign aid disbursements and debt relief but have debt relief initiatives complemented or substituted for other aid has debt relief been additional this paper examines the evolving relationship between debt relief and other foreign aid in ssa using recently constructed and improved data estimating a model of aid allocation for 42 ssa countries using panel data for 1988 2006 it finds that the relationships between debt debt relief aid and resource transfers have changed over time this paper interprets how policy changes may have modified the underlying relationship between aid and debt relief

does foreign aid mitigate the adverse effect of expropriation risk on foreign direct investment abstract we construct a model of fdi risk and aid where a country loses access to fdi and aid if the country expropriates fdi we show that i the threat of expropriation leads to under investment ii the optimal level of fdi decreases as the risk of expropriation rises and iii aid mitigates the adverse effect of expropriation risk on fdi the empirical analysis employs data for 35 low income countries and 28 countries in sub saharan africa over the period 1983 2004 we find that risk has a negative effect on fdi and that aid mitigates but cannot eliminate the adverse effect of risk

the allocation of aid among developing countries a multi donor analysis using a per capita aid index abstract this paper seeks to measure the relative aid giving performance of aid donors in terms of the inter recipient distribution of their aid performance is taken to be the extent to which a donor bases its aid allocation on the relative needs of recipient countries donor performance is measured by an income weighted per capita aid index formulated in this paper this index was calculated using the per capita allocations to a sample of 85 recipient countries in the years 1969 84 the performance of 17 dac members plus that of a number of multilateral agencies and that of the dac and these agencies combined is identified results indicate that the performance of four countries belgium finland denmark and norway was generally superior to that of other donors

foreign aid and domestic savings in less developed countries some tests for causality abstract the negative correlation between foreign aid and domestic savings rates in less developed countries is an accepted fact in the existing literature the direction of causality however remains a subject of dispute in this paper we use time series data to investigate causal relationships we conclude that causal relationships are not universal and it is suggested that in those countries where they do hold the direction of causality may depend upon the proportions of aid from bilateral and multilateral sources

reform of foreign aid policies the issue of inter country allocation in africa abstract the aim of this paper is to assess the inter country allocation of foreign aid by selected donors to 18 recipients in eastern and southern africa esa the five country cases discussed in this paper show that the aid environment has not been supportive of recipients reform efforts during the 1980s a comparison is made between international development agency ida allocation and other donors cross section and time series regressions demonstrate a variety of considerations influencing bilateral aid lastly in discussing present aid policies and coordination efforts three options are analyzed with respect to future aid policies it is suggested that new initiatives by ida in its allocation criteria and aid coordination efforts can yield some progress

the economic and political determinants of imf and world bank lending in the middle east and north africa mena assumes both political and economic significance politically it is arguably the epicentre of world crisis chronically war prone and the site of the world s most protracted conflicts hinnebusch 2003 p 1 economically it owns the bulk of the world s oil reserves driving in particular the usa economic engine in light of the region s geopolitically and economically strategic position in the world economy it is clear that economic and political factors are inextricably linked when it comes to the manner in which the west particularly the usa responds to the region s needs

funding self sustaining development the role of aid fdi and government in economic success this article challenges a long held development policy assumption that aid and foreign direct investment fdi serve as substitutes or complements in accelerating the development of the world s poorer countries we show both theoretically and empirically that aid and fdi affect development differently aid contributes powerfully to both economic growth and human development and the higher the level of human capital in a country the more aid contributes by contrast fdi at best has no effect on economic growth and actually slows the rate of human development in less developed countries we find no evidence that the degree of democratic responsiveness in government conditions the effectiveness of either aid or fdi although we do find that democracy independently increases human development in all but the most developed countries our results demonstrate that fdi and aid are not and cannot be substitutes in the development of the world s poorer countries nor even can they be thought of as complements certainly not at mid to low levels of development in the end poor countries need democracy and aid not fdi we are extremely grateful to susan rose ackerman gustav ranis frances rosenbluth kenneth scheve and participants at the leitner political economy seminar at yale university in december 2003 for very helpful comments we also received valuable suggestions from two anonymous reviewers stephen kosack would like to thank the national science foundation for the support of a graduate research fellowship

some determinants of foreign aid to india 1960 1985 abstract using a unique data set of aid to india from all sources 1960 1985 we discuss the magnitude and composition of aid and present a principal components analysis of aid giving we then attempt to get at the underlying patterns and causes of aid giving using factor analytic techniques and explain the level of foreign aid by employing a partial adjustment model we find that latent motivations to classify the donor countries into four convenient groups each with different political and economic motivations we also find that the latent variables capturing the motivations of the united states western european countries eastern european countries as well as last year s aid and the balance of trade but not gdp growth are significant determinants of the level of aid

us politics and world bank ida lending this paper studies the role of us political factors in the allocation of world bank concessional lending where us political interests are proxied by voting similarity in the united nations general assembly on issues identified as important by the us department of state in contrast to previous studies we find that the us exerted a significant influence on ida lending during the period 1993 2000 we demonstrate that the influence was both statistically as well as economically significant finally we demonstrate that our result is robust with respect to the omission of the ida country performance rating index

can the world cut poverty in half how policy reform and effective aid can meet international development goals abstract poverty in the developing world will decline by about one half by 2015 if the trends of the 1990s persist most of this poverty reduction will occur in asia however while poverty will decline only slightly in africa effective aid could make a contribution to greater poverty reduction in lagging regions even more potent would be significant policy reform in these countries we develop a model of efficient aid in which flows respond to policy improvements that create a better environment for poverty reduction and effective aid we investigate scenarios of policy reform and efficient aid that point the way to how the world can cut poverty in half in every major region

continuum economies with finite coalitions core equilibria and widespread externalities abstract we develop a new model of a continuum economy with coalitions consisting of only finite numbers of agents the core called the f core is the set of allocations that are stable against improvement by finite coalitions and feasible by trade within finite coalitions even with widespread externalities preferences depend on own consumptions and also on the entire allocation up to the null set we obtain the result that the f core coincides with the walrasian allocations without widespread externalities the f core the aumann core and the walrasian allocations all coincide however with widespread externalities there is no obvious natural definition of the aumann core

aid policies and growth the authors of this paper use a new database on foreign aid to examine the relationships among foreign aid economic policies and growth of per capita gdp in panel growth regressions for 56 developing countries and 6 four year periods 1970 93 they find that the policies that have a great effect on growth are those related to fiscal surplus inflation and trade openness they construct an index for those three policies and have that index interact with foreign aid they have instruments for both aid and aid interacting with policies they find that aid has a positive impact on growth in developing countries with good fiscal monetary and trade policies in the presence of poor policies aid has no positive effect on growth this result is robust in a variety of specifications which include or exclude middle income countries include or exclude outliers and treat policies as exogenous or endogenous they examine the determinants of policy and find no evidence that aid has systematically affected policies either for good or for ill they estimate an aid allocation equation and show that any tendency for aid to reward good policies has been overwhelmed by donors pursuit of their own strategic interests in a counterfactual they reallocate aid reduce the role of donor interests and increasing the importance of policy such a reallocation would have a large positive effect on developing countries growth rates

determinants of the major industrialized countries exports to developing countries abstract the analysis of the market position of six major industrialized countries in developing countries starts by describing the similarity of their export patterns by commodity groups and countries of destination which may be taken as an indicator of the degree of competition considering both aspects together west germany s exports display the greatest similarity with italian and british supplies the export market shares are then explained in a two stage approach first they are broken down into a commodity and a country component by means of a linear decomposition procedure second multiple regression is applied considering the commodity structure of demand geographical distance political historical linkages direct investment and development aid as explanatory variables the results show that for west germany japan and the united states the export market shares are mainly dependent on economic factors such as demand structure and transport costs due to geographical distance the french and british shares however are primarily determined by historical links and to a lesser extent by demand structure geographical distance plays no role at all italy tends to fall somewhere between the two groups

do developing country wto members receive more aid for trade aft since the world trade organization wto doha development agenda dda negotiations started in 2001 the importance of aid for trade aft has been well recognised as a useful tool for facilitating trade economic growth and social development in developing countries at the wto hong kong ministerial conference in december 2005 the aft initiative was launched and many high income member countries pledged to increase their aft contributions particularly for the least developed member countries ldc this paper aims to assess whether and to what extent the wto s developing member countries have received more aft for this purpose a system generalised method of moments is applied to a sample of 118 recipient countries for the period 2001 10 we find evidence that while ldc wto members on average receive relatively more aft than other developing countries the difference has not increased since launch of the aft initiative among the three categories of aft the positive wto membership effect for ldc members increased for building productive capacity and for trade policy and regulation but declined for infrastructure

explaining global patterns of international aid for linked biodiversity conservation and development summary there is little systematic knowledge about the nature extent and trends of international aid for projects that link biodiversity conservation and development goals this study uses a new dataset to analyze spatial and temporal patterns of such aid globally over the past three decades results reveal significant donor selectivity in aid allocation though linked conservation and development aid comprised more than two thirds of all biodiversity related assistance biodiversity aid generally was directed to biodiversity rich well governed countries but countries able to exert greater political leverage secured more linked aid than aid targeted to conservation without a stated development objective

determinants of canadian bilateral aid allocations humanitarian commercial or political in this paper we examine the determinants of the allocation of canadian bilateral aid over the period 1984 2000 we draw on models of donor behaviour that allow us to incorporate humanitarian commercial and political considerations the trinity of mixed motives that affect canadian aid we find that allocations are moderately altruistic recipient country human rights and membership in the commonwealth and la francophonie also affect aid flows most strikingly our results suggest that canadian aid flows became less altruistic over this period and commercial motives became increasingly important jel classification h50 o10 les determinants des allocations de l aide humanitaire canadienne humanitaires commerciaux ou politiques ce memoire etudie les determinants de l allocation de l aide bilaterale canadienne dans la periode 1984 2000 on utilise des modeles de comportement de donateur qui permettent de prendre en considerations les motivations humanitaires commerciales et politiques la trinite de motifs mixtes qui affectent l aide canadienne on decouvre que les allocations sont moderement altruistes le fait pour un pays de defendre bien les droits de la personne et d etre membre du commonwealth et de la francophonie affecte les flux d aide plus important peut etre les resultats suggerent qu au cours de cette periode les flux d aide canadienne deviennent moins altruistes et les motifs commerciaux de plus en plus importants

does foreign aid target the poorest to examine the extent to which foreign aid reaches people at different levels of wealth in africa i use household surveys to measure the subnational distribution of a country s population by wealth quintiles and match this information to data on the location of aid projects from two multilateral donors within countries aid disproportionately flows to regions with more of the richest people aid does not favor regions with more of the poorest people these findings violate the stated preferences of the multilateral donors under study suggesting that the donors either cannot or are not willing to exercise control over the location of aid projects within countries the results also suggest that aid is not being allocated effectively to alleviate extreme poverty

the macroeconomic impact of development aid a critical survey the early literature explained aid s macroeconomic impact in the context of the dual gap model showing a clear link between aid and growth many now believe that the empirical evidence shows there to be no such relationship this paper critically reviews the different theoretical perspectives the dual gap model the savings debate recipient fiscal response and aid as dutch disease and the empirical debates on aid savings and growth the basis for denying a relationship between aid and growth is shown to be weak though more recent areas of research offer promising directions for future work

empirical results of aid motivations australia s bilateral aid program abstract this paper briefly surveys the existing literature on the motivations of overseas aid the emphasis is on the two competing models of recipient need and donor interest and the paper estimates these two models using data for australian bilateral aid both the recipient need model and the donor interest model are supported by the econometric analysis this is in stark contrast to the results of other studies for large states such as the united states and the united kingdom these prior studies show no support for the recipient need model whereas the donor interest model is supported the atypical result for the australian bilateral aid program requires further analysis in terms of non nested hypotheses

donor preferences and recipient fiscal behavior a simultaneous analysis of foreign aid we theoretically develop and empirically estimate a preference model determining foreign aid donor behavior aid access and levels are separately determined by endogenous budgetary allocations the international economic environment the distribution of income between countries basic human needs the small country effect and regional bias we find fungibility of aid in recipient budgets is due to donor and recipient preferences despite the importance of other economic influences we find a significant pro poor country bias in aid allocations although little aggregate influence of basic human needs or regional bias the small country effect is significant for two of six donors jel f35 o19 h 77

bilateral donors and the age of the national interest what prospects for challenge by development agencies summary foreign aid agencies represent and champion global development priorities within a donor nation increasingly however these agencies sit within donor governments that are strongly committed to upholding the national interest through their development commitments this paper is concerned with how bilateral aid agencies manage this tension and how they might continue to serve the altruistic aims of development the main research question asks if autonomy or a combination of autonomies can improve a development agency s ability to defend the humanitarian imperative of development against normative pressures privileging the national interest by drawing on theories of autonomy within public management literatures it is possible to identify points of leverage for development agencies where spaces for autonomous preferences and actions remain as well as sources of limitation where such opportunities are considerably reduced six types of autonomy are examined across three nations widely perceived as strong performers as donors norway the uk and sweden the paper suggests that while structural autonomy is critical for preserving humanitarian motivations there are also unexplored opportunities within other autonomous spheres a multi dimensional examination of autonomy highlights the varying capacity that development agencies have to resist pressures to strongly nationalize the global development project

effective aid how democracy allows development aid to improve the quality of life abstract research into foreign aid has mostly focused on its ability to affect economic i e gdp per capita growth conclusions have been mixed i consider aid s effectiveness differently by its ability to improve quality of life i find that though aid does not affect quality of life in the aggregate it is effective when combined with democracy and ineffective and possibly harmful in autocracies the results suggest that aid would be more effective if it were combined with efforts to encourage democratization

why foreign economic assistance there is general agreement in the economics literature that resource flows among countries in response to market incentives enhance global economic efficiency and welfare in both rich and poor countries it has also been argued that in the presence of capital market imperfections the transfer of resources from developed country governments to the governments of developing countries on commercial terms either directly or through multilateral agencies can normally be expected to be welfare enhancing in both developed and developing countries 1 these arguments do not apply however to official development assistance that involves a substantial grant element two arguments have typically been used in support of transfers that include a grant component one set is based on the economic and strategic self interest of the donor country the second is based on the ethical or moral responsibility of the residents of wealthy countries toward the residents of poor countries both sets of arguments have been the subject of continuous challenge i argue in this article that neither the donor self interest nor the ethical responsibility argument can be rejected on logical or theoretical grounds i also assert that the empirical evidence in support of both the economic and the strategic self interest arguments is exceedingly weak the ethical responsibility arguments impose less burden on the empirical evidence but they are subject to continuous challenge by political theorists and moral philosophers donor self interest

a paradox of redistribution in international aid the determinants of poverty oriented development assistance summary donors differ in the amount of official development assistance dedicated to poverty reduction we investigate the causes of variation over time and donors by employing both a regression approach with aggregate data on bilateral aid and two short country studies on germany and the united kingdom we find that there is a trade off between the total amount of money given and the amount of money given to poor countries the trade off is similar to the paradox of redistribution of targeting vs redistribution in rich welfare states case study evidence illustrates how countries have managed this tradeoff

a two part sample selection model of british bilateral foreign aid allocation the allocation of british bilateral foreign aid among developing countries is simultaneously modelled focusing on allocations during the period 1980 87 two aid allocation decisions are analysed using a variant of the lee maddala econometric model the first decision concerns the determination of developing country eligibility for aid while the second concerns the amount of aid eligible countries are allocated given the implied two part decision making process sample selection techniques are employed it is hypothesized that british bilateral aid eligibility and amount decisions are based on bristain s humanitarian commercial and political interests in developing countries results obtained indicate that these decisions are generally consistent with each of these interests especially those relating to the political importance of commonwealth members

a new approach to the allocation of aid among developing countries is the usa different from the rest summary this paper attempts to explain the factors that determine the geographical allocation of foreign aid its novelty is that it develops a rigorous theoretical model and conducts the corresponding empirical investigations based on a large panel dataset we run regressions for different major donors united states canada france italy japan united kingdom and multilateral organizations with the explicit objective of establishing whether the united states in light of its geopolitical hegemony behaves differently from others we find that all the donors respond to recipient need in their allocation of aid but that the united states puts less emphasis on this than the other donors with the exception of japan we also find that the united states puts more emphasis on donor recipient linkages than do the other donors suggesting that the united states attaches greater importance to issues of donor interest for example geopolitical commercial and other links with specific recipients

politics and the effectiveness of foreign aid abstract critics of foreign aid programs have long argued that poverty reflects government failure in this paper i test predictions for aid effectiveness based on an analytical framework that relates aid effectiveness to political regimes i find that aid does not significantly increase investment nor benefit the poor as measured by improvements in human development indicators but it does increase the size of government the impact of aid does not vary according to whether recipient governments are liberal democratic or highly repressive but liberal political regimes and democracies ceteris paribus have on average 30 lower infant mortality than the least free regimes this may be due to greater empowerment of the poor under liberal regimes even though the political elite continues to receive the benefits of aid programs an implication is that short term aid targeted to support new liberal regimes may be a more successful means of reducing poverty than current programs

foreign aid responses to political liberalization this paper analyzes the impact of political liberalization on receipt of foreign aid it distinguishes different types of donors facing different constraints in rewarding democratization with foreign aid notably bilateral donors the world bank and the european commission based on a sample of 174 recipient countries from 1995 to 2009 the paper jointly examines short term dynamics and long term effects of sustained liberalization except for the world bank donors react to regime change bilateral donors are found to reward political liberalization in the second year after transition

tiebout economies with differential genetic types and endogenously chosen crowding characteristics abstract we consider a tiebout economy with differential crowding and public projects in which agents are distinguished by their tastes and genetic endowments agents choose which crowding characteristic for example a skill they wish to express and this affects their value to other members of their jurisdiction club firm etc an agent s choice is influenced both by his genetic endowment which affects his cost of acquiring crowding characteristics and by his preferences over which crowding characteristic he expresses we show that if small groups are strictly effective the core is equivalent to the set of anonymous competitive equilibrium outcomes but that the core generally contains taste homogeneous jurisdictions journal of economic literature classification numbers h41 h72

do corrupt governments receive less foreign aid critics of foreign aid programs argue that these funds often support corrupt governments and inefficient bureaucracies supporters argue that foreign aid can be used to reward good governments this paper documents that there is no evidence that less corrupt governments receive more foreign aid on the contrary according to some measures of corruption more corrupt governments receive more aid also we could not find any evidence that an increase in foreign aid reduces corruption in summary the answer to the question posed in the title is no

on a market for coalitions with indivisible agents and lotteries abstract given a game the set of joint lotteries over partitions of the agents of any subgame induces a subset of the vectors of balancing weights for the subgame games whose subgames are all balanced with respect to these vectors of balancing weights are called totally l balanced games we show that such games are precisely the ones that can be generated from direct lottery markets total l balancedness is equivalent to superadditivity thus many interesting games that are not totally balanced but are superadditive can be generated from direct lottery markets we also show that the core of a game coincides with the set of lottery equilibrium utility vectors of its direct lottery market journal of economic literatureclassification numbers c71 d51

foreign aid and domestic politics voting in congress and the allocation of usaid contracts across congressional districts this paper investigates the relationship between congressional support for foreign aid and the distribution of united states agency for international development usaid contract spending across congressional districts within the united states the extent to which such a relationship matters has become increasingly important in recent years as the end of the cold war and the advent of the republican controlled congress have eroded the traditional base of support for foreign aid we develop a model to illustrate how the distribution of contract spending could be used to increase support for foreign aid but at the expense of development impact in effect trading quality for quantity data on domestic foreign aid contract spending and votes in the 104th congress house of representatives allow us to test whether the geographic distribution of usaid contract spending within the united states is consistent with a systematic attempt to build support for foreign aid in congress econometric results provide little evidence of such attempts apparently because voting on this issue is insensitive to the distribution of contract spending

the fungibility of u s military and non military assistance and the impacts on expenditures of major aid recipients abstract this paper examines the impact of u s military and non military assistance on the allocation of public and private sector spending for eight major recipients over the 1972 1987 period the model assumes that an aid recipient s effective post assistance budget constraint is a priori unknown and must be estimated two versions of the model are tested in version a the data is converted into real u s dollars using official exchange rates in version b the data is converted using purchasing power parity exchange rates provided by summers and heston 1991 major findings are the same for both versions u s aid is highly fungible with a significant portion channeled to the private sector where it finances current consumption relatively more than investment