Donor strategy under the fungibility of foreign aid
Description
We develop a political-economic model of aid fungibility: a part of aid is diverted away from its intended target by lobby groups. The size of this diversion - the degree of aid fungibility - is determined endogenously by the recipient government. The donor can affect the equilibrium degree of fungibility by choosing both the size of aid and the timing of its decision. We derive a condition under which the donor's reaction to fungibility is to reduce the amount of aid. Under this condition, if the donor acts as a follower, both the donor and the target group are better off.
Impact and interest:
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| ID Code: | 180581 | ||
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| Item Type: | Contribution to Journal (Journal Article) | ||
| Refereed: | Yes | ||
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| Measurements or Duration: | 19 pages | ||
| DOI: | 10.1111/j.1468-0343.2004.00138.x | ||
| ISSN: | 0954-1985 | ||
| Pure ID: | 42952316 | ||
| Divisions: | Past > QUT Faculties & Divisions > QUT Business School Current > Schools > School of Economics & Finance |
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| Copyright Owner: | Consult author(s) regarding copyright matters | ||
| Copyright Statement: | This work is covered by copyright. Unless the document is being made available under a Creative Commons Licence, you must assume that re-use is limited to personal use and that permission from the copyright owner must be obtained for all other uses. If the document is available under a Creative Commons License (or other specified license) then refer to the Licence for details of permitted re-use. It is a condition of access that users recognise and abide by the legal requirements associated with these rights. If you believe that this work infringes copyright please provide details by email to qut.copyright@qut.edu.au | ||
| Deposited On: | 20 Feb 2020 09:17 | ||
| Last Modified: | 03 Mar 2024 07:05 |
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