Foreign Aid and Fiscal Behavior in a Bounded Rathionality Model: Different Policy Regimes
AbstractWe examine how the source of foreign aid affects the composition of the recipient government's spending. Does the source of aid -- bilateral or miltilateral -- influence ricipient policy-makers' choice between development and nondevelopment expenditure? We depart from previous literature by introducing strong asymmetries in policy-maker's preferences. With financial constraints set by foreign aid and domestic revenues, this formalization allows us to model and estimate the fiscal behavior of government policy-makers in the presense of foreign aid.
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Bibliographic InfoPaper provided by Rutgers University, Department of Economics in its series Departmental Working Papers with number 199812.
Date of creation: 10 Jun 1998
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foreign aid; India; international assistance;
Other versions of this item:
- Ira N. Gang & Haider Ali Khan, 1999. "Foreign aid and fiscal behavior in a bounded rationality model: Different policy regimes," Empirical Economics, Springer, vol. 24(1), pages 121-134.
- F35 - International Economics - - International Finance - - - Foreign Aid
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