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Lobbying by Ethnic Groups and Aid Allocation

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Author Info
Sajal Lahiri
Pascalis Raimondos-Møller

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Abstract

We develop a political-economic model of foreign aid allocation. Each ethnic group in the donor country lobbies the government for allocating more aid to its country of origin, and the government accepts contributions from lobby groups. Initial per-capita income of the recipients and those of the ethnic groups are shown to be important determinants of the solution of the political equilibrium. We also examine the effects of changes in the degree of corruption, aid fatigue, and ethnic composition, in the donor country on the allocation of aid.

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Paper provided by Economic Policy Research Unit (EPRU), University of Copenhagen. Department of Economics in its series EPRU Working Paper Series with number 99-05.

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Date of creation: Jan 1999
Date of revision: Oct 2003
Handle: RePEc:kud:epruwp:99-05

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  1. Dixit, A. & Helpman, E., 1996. "Common Agency and Coordination: General Theory and Application to Tax Policy," Papers 179, Princeton, Woodrow Wilson School - Public and International Affairs.
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  2. Alberto Alesina & David Dollar, 1998. "Who Gives Foreign Aid to Whom and Why?," NBER Working Papers 6612, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  3. Bernheim, B Douglas & Whinston, Michael D, 1986. "Common Agency," Econometrica, Econometric Society, vol. 54(4), pages 923-42, July. [Downloadable!] (restricted)
  4. Grossman, Gene M & Helpman, Elhanan, 1994. "Protection for Sale," American Economic Review, American Economic Association, vol. 84(4), pages 833-50, September. [Downloadable!] (restricted)
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  5. Lahiri, Sajal & Raimondos-Moller, Pascalis, 1997. "Competition for aid and trade policy," Journal of International Economics, Elsevier, vol. 43(3-4), pages 369-385, November. [Downloadable!] (restricted)
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  6. Rodrik, Dani, 1995. "Political economy of trade policy," Handbook of International Economics, in: G. M. Grossman & K. Rogoff (ed.), Handbook of International Economics, edition 1, volume 3, chapter 28, pages 1457-1494 Elsevier. [Downloadable!] (restricted)
  7. Trumbull, William N & Wall, Howard J, 1994. "Estimating Aid-Allocation Criteria with Panel Data," Economic Journal, Royal Economic Society, vol. 104(425), pages 876-82, July. [Downloadable!] (restricted)
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(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Meyer, Wolfgang & Raimondos-Møller, Pascalis, 1999. "The Politics Of Foreign Aid," Working Papers 04-1999, Copenhagen Business School, Department of Economics. [Downloadable!]
    Other versions:
  2. Sergio Tezanos Vazquez (ICEI and QEH), . "The Geographical Allocation Pattern of Spanish Official Development Assistance," QEH Working Papers qehwps152, Queen Elizabeth House, University of Oxford. [Downloadable!]
  3. Murshed, S. Mansoob, 2002. "Strategic Interaction and Donor Policy Determination in a Domestic Setting," Working Papers UNU-WIDER Research Paper , World Institute for Development Economic Research (UNU-WIDER). [Downloadable!]
  4. Boerner, Kira, 2005. "Having Everyone in the Boat May Sink it - Interest Group Involvement and Policy Reforms," Discussion Papers in Economics 730, University of Munich, Department of Economics. [Downloadable!]
  5. Stéphane Pallage & Michel A. Robe & Catherine Bérubé, 2004. "On the Potential of Foreign Aid as Insurance," Cahiers de recherche 0404, CIRPEE. [Downloadable!]
  6. Börner, Kira, 2004. "Political Economy Reasons for Government Inertia: The Role of Interest Groups in the Case of Access to Medicines," Discussion Papers in Economics 313, University of Munich, Department of Economics. [Downloadable!]
  7. Farhad Nili & Gabriel Talmain, . "Rent-seeking, Occupational Choice and Oil Boom," Discussion Papers 01/11, Department of Economics, University of York. [Downloadable!]
  8. Hefeker, Carsten, 2005. "Project Aid or Budget Aid? The Interests of Governments and Financial Institutions," Proceedings of the German Development Economics Conference, Kiel 2005 19, Verein für Socialpolitik, Research Committee Development Economics. [Downloadable!]
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  9. Jean-Claude Berthélemy, 2004. "Bilateralism and multilateralism in official development assistance policies," Cahiers de la Maison des Sciences Economiques bla04104, Université Panthéon-Sorbonne (Paris 1). [Downloadable!]
  10. Lahiri, Sajal & Raimondos-Møller, Pascalis, 2000. "Special Interest Politics and Aid Fungibility," CEPR Discussion Papers 2482, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
  11. Round, Jeffery I. & Odedokun, Matthew, 2003. "Aid Effort and its Determinants," Working Papers UNU-WIDER Research Paper , World Institute for Development Economic Research (UNU-WIDER). [Downloadable!]
  12. SAWADA Yasuyuki & YAMADA Hiroyuki & KUROSAKI Takashi, 2008. "Is Aid Allocation Consistent with Global Poverty Reduction?: A Cross-Donor Comparison," Discussion papers 08025, Research Institute of Economy, Trade and Industry (RIETI). [Downloadable!]
  13. Carsten Hefeker & Katharina Michaelowa, 2005. "Can process conditionality enhance aid effectiveness?," Public Choice, Springer, vol. 122(1), pages 159-175, January. [Downloadable!] (restricted)
  14. Mark McGillivray, 2005. "What determines African bilateral aid receipts?," Journal of International Development, John Wiley & Sons, Ltd., vol. 17(8), pages 1003-1018. [Downloadable!]
  15. Jean-Claude Berthélemy, 2005. "Bilateral donors' interest vs. Recipients' development motives in aid allocation : do all donors behave the same ?," Cahiers de la Maison des Sciences Economiques bla05001, Université Panthéon-Sorbonne (Paris 1). [Downloadable!]
  16. James M. Boughton & Alex Mourmouras, 2002. "Is Policy Ownership An Operational Concept?," IMF Working Papers 02/72, International Monetary Fund. [Downloadable!]
  17. Zhihao Yu, 2003. "Why Take on the Tobacco Industry: the Political Economy of Government Anti-smoking Campaign," Carleton Economic Papers 03-04, Carleton University, Department of Economics. [Downloadable!]
  18. John A. List & Daniel M. Sturm, 2004. "How Elections Matter: Theory and Evidence from Environmental Policy," NBER Working Papers 10609, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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