Good governance and good aid allocation.
We model the aid allocation process as a rent-seeking contest between two countries and investigate the effects of differing allocation rules on recipients' behavior in a simple framework. We investigate the aid allocation mechanism design that attempts to increase the governance quality of potentia...
| Publicado en: | Journal of Development Economics Vol. 89; no. 1; pp. 12 - 19 |
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| Autores principales: | , |
| Formato: | Artículo |
| Publicado: |
Elsevier Science
May 2009
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| Acceso en línea: | Ver este registro en EBSCOhost |
| fields | @attributes: recordID: 1 pdfLink: plink: https://search.ebscohost.com/login.aspx?direct=true&db=ssf&AN=511415214&site=ehost-live header: @attributes: shortDbName: ssf uiTerm: 511415214 longDbName: Social Sciences Full Text (H.W. Wilson) uiTag: AN controlInfo: bkinfo: jinfo: jid: 03043878 JDE jtl: Journal of Development Economics issn: 03043878 maglogo: N pubinfo: dt: May 2009 vid: 89 iid: 1 pid: 1004 pub: Elsevier Science artinfo: ui: 511415214 10.1016/j.jdeveco.2008.06.010 ppf: 12 ppct: 7 formats: tig: atl: Good governance and good aid allocation. aug: au: Epstein, Gil S. Gang, Ira N. su: Mathematical models International economic assistance Resource allocation -- Mathematical models Authority sug: subj: Mathematical models International economic assistance Resource allocation -- Mathematical models Authority keyword: Governance (Social sciences) ab: We model the aid allocation process as a rent-seeking contest between two countries and investigate the effects of differing allocation rules on recipients' behavior in a simple framework. We investigate the aid allocation mechanism design that attempts to increase the governance quality of potential recipient countries: the potential recipients spend costly resources improving governance, while the donor country allocates the fund based on their governance quality. The paper compares two mechanisms: one uses a simple winner-takes-all tournament to award the entire available purse to the country with the best governance; while under the other aid is distributed among countries in proportion to their governance qualities. The paper shows the second mechanism outperforms the first only if competing countries are sufficiently asymmetric. Moreover, the recipient who is most effective in governance - and stands to benefit the most from development assistance - has interests opposite to those of the donor. In addition, the paper shows that if the donor country allocates the fund based on both governance and the levels of poverty, it may result in a poverty trap: the leaders of potential recipient countries deliberately allocate funds away from the poorest so as not to better their position in order to receive more aid. Copyright (c) 2009 Elsevier B.V. pubtype: Academic Journal doctype: Article src: R language: English refInfo: copyright: @attributes: flag: N holdings: @attributes: islocal: N |
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