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Decentralizing Aid with Interested Parties

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Author Info

  • Epstein, Gil S.
  • Gang, Ira N.

Abstract

This paper analyzes the decentralization of decision-making in aid-giving in a theoretical rent-seeking framework. In this analysis the root donor establishes a necessary criterion for potential recipients: good governance. The potential recipients compete in hierarchal contests for funds. The paper investigates whether, under certain reasonable conditions, fashionable aid procedures will lead to the development of a poverty trap.

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File URL: http://www.wider.unu.edu/stc/repec/pdfs/rp2006/rp2006-06.pdf
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Bibliographic Info

Paper provided by World Institute for Development Economic Research (UNU-WIDER) in its series Working Paper Series with number RP2006/06.

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Length: 18 pages
Date of creation: 2006
Date of revision:
Handle: RePEc:unu:wpaper:rp2006-06

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Related research

Keywords: foreign aid; governance; decentralization; rent seeking;

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References

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  1. McGillivray, Mark & Feeny, Simon & Hermes, Niels & Lensink, Robert, 2005. "It Works; It Doesn't; It Can, But That Depends?: 50 Years of Controversy over the Macroeconomic Impact of Development Aid," Working Paper Series RP2005/54, World Institute for Development Economic Research (UNU-WIDER).
  2. Yeon-Koo Che & Ian Gale, 1998. "Caps on Political Lobbying," Microeconomics 9809003, EconWPA.
  3. Jac C. Heckelman & Stephen Knack, 2008. "Foreign Aid and Market-Liberalizing Reform," Economica, London School of Economics and Political Science, vol. 75(299), pages 524-548, 08.
  4. Baye, M.R. & Kovenock, D. & De Vries, C.G., 1992. "Rigging the Lobbying Process: An Application of the All- Pay Auction," Papers 9-92-2, Pennsylvania State - Department of Economics.
  5. Ellingsen, Tore, 1991. "Strategic Buyers and the Social Cost of Monopoly," American Economic Review, American Economic Association, vol. 81(3), pages 648-57, June.
  6. Gil Epstein & Shmuel Nitzan, 2006. "Reduced prizes and increased effort in contests," Social Choice and Welfare, Springer, vol. 26(3), pages 447-453, June.
  7. Nitzan, Shmuel, 1994. "Modelling rent-seeking contests," European Journal of Political Economy, Elsevier, vol. 10(1), pages 41-60, May.
  8. Epstein, Gil S., 2000. "Personal productivity and the likelihood of electoral success of political candidates," European Journal of Political Economy, Elsevier, vol. 16(1), pages 95-111, March.
  9. Gil S. Epstein & Shmuel Nitzan, 2002. "Effort and Performance in Public-Policy Contests," CESifo Working Paper Series 634, CESifo Group Munich.
  10. Gil S. Epstein & Ira N. Gang, 2006. "Contests, NGOs, and Decentralizing Aid," Review of Development Economics, Wiley Blackwell, vol. 10(2), pages 285-296, 05.
  11. Mavrotas, George & Villanger, Espen, 2006. "Multilateral Aid Agencies and Strategic Donor Behaviour," Working Paper Series DP2006/02, World Institute for Development Economic Research (UNU-WIDER).
  12. Arye L. Hillman & John G. Riley, 1989. "Politically Contestable Rents And Transfers," Economics and Politics, Wiley Blackwell, vol. 1(1), pages 17-39, 03.
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Citations

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Cited by:
  1. Gil S. Epstein & Ira N Gang, 2006. "The Hope for Hysteresis in Foreign Aid," Departmental Working Papers 200628, Rutgers University, Department of Economics.

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