On the tying of aid to tariff reform

Lahiri, Sajal & Raimondos-Møller, Pascalis (1997) On the tying of aid to tariff reform. Journal of Development Economics, 54(2), pp. 479-491.

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This paper considers the welfare effects of foreign aid that is tied to changes in the recipient's tariff. By constructing a three-country model with tariffs, and by allowing for changes both in the amount of aid and in the tariff rates, we are able to consider the welfare implications of two different rules of aid conditionality: (i) a rule which leaves the donor's welfare unchanged, and (ii) a rule which leaves the recipient government's total revenue unchanged. It is shown that the tying of aid to a tariff reform can, inter alia, be used to ensure Pareto improvement.

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25 citations in Scopus
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23 citations in Web of Science®

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ID Code: 94028
Item Type: Journal Article
Refereed: Yes
Keywords: Tariffs; Tied-aid; Welfare
DOI: 10.1016/S0304-3878(97)80001-6
ISSN: 0304-3878
Divisions: Current > QUT Faculties and Divisions > QUT Business School
Current > Schools > School of Economics & Finance
Copyright Owner: Copyright 1997 Elsevier Science B.V.
Deposited On: 22 Mar 2016 01:40
Last Modified: 22 Mar 2016 01:40

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