Takumi Haibara (Graduate School of International Cooperation Studies (GSICS); Kobe University, Japan)
Abstract
Tied aid invites a Pareto-improving situation in the presence of environmental externalities. Under certain conditions, although the aid recipient government's marginal propensity to consume the purchased good is lower or higher than the corresponding marginal propensity of the aid recipient individuals, the welfare of both the donor and the recipient improves in the presence of production- or consumption-based pollution. This result counters the conventional wisdom of tied aid presented by Kemp and Kojima (1985).
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Article provided by Department of Economics, Delhi School of Economics in its journal Indian Economic Review.
Volume (Year): 41 (2006) Issue (Month): 2 (December) Pages: 195-207 Download reference. The following formats are available: HTML
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Find related papers by JEL classification: F18 - International Economics - - Trade - - - Trade and Environment F35 - International Economics - - International Finance - - - Foreign Aid
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