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Foreign Aid, Infrastructure Development and Welfare: An Intertemporal Analysis

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  • Slobodan Djajić
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    Abstract

    The author examines the welfare implications of foreign aid within the framework of a two-period, two-country model of international trade. It is up to the donor country to decide what fraction of any given aid package is to be made available for the recipient's immediate consumption in period one, and what part should be allocated for investment in infrastructure that expands the recipient's production possibilities in period two. The focus of the analysis is on the conditions under which both countries agree or disagree on the manner in which the aid funds should be divided between the two options. Copyright 2009 The Author. Journal compilation 2009 Blackwell Publishing Ltd.

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    Bibliographic Info

    Article provided by Wiley Blackwell in its journal Review of Development Economics.

    Volume (Year): 13 (2009)
    Issue (Month): s1 (08)
    Pages: 393-402

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    Handle: RePEc:bla:rdevec:v:13:y:2009:i:s1:p:393-402

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    Web page: http://www.blackwellpublishing.com/journal.asp?ref=1363-6669

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    Cited by:
    1. Stephen M. Miller & Kyriakos C. Neanidis, 2012. "Demographic Transition and Economic Welfare: The Role of Humanitarian Aid," Centre for Growth and Business Cycle Research Discussion Paper Series 164, Economics, The Univeristy of Manchester.

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