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A Roundtable on Foreign Aid Weapon Exports and Aid to Developing Countries

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  • Bruno S. Frey

    (Department of Economics University of Konstanz and University of Basel)

Abstract

The goal of the rich countries should be to aid the poor countries to increase their standard of living but not to increase their holdings of weapons. It is shown that a basic dilemma arises. The structure of “consumption†of the recipient countries cannot be influenced by giving aid in the form of (civilian) goods rather than untied foreign exchange. The consumption of civilian goods can be increased by granting a price-subsidy but this leads to a smaller increase in utility than obtained with a transfer in money or kind. Transfers of goods with restricted substitutability and “all-or-none†schemes are suggested to overcome these conflicts, but they imply an interference with the internal affairs of the poor countries.

Suggested Citation

  • Bruno S. Frey, 1975. "A Roundtable on Foreign Aid Weapon Exports and Aid to Developing Countries," Conflict Management and Peace Science, Peace Science Society (International), vol. 1(2), pages 117-126, February.
    • Handle: RePEc:sae:compsc:v:1:y:1975:i:2:p:117-126
    DOI: 10.1177/073889427500100202
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    References listed on IDEAS

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    1. West, E G, 1971. "Subsidized but Compulsory Consumption Goods: Some Special Welfare Cases," Kyklos, Wiley Blackwell, vol. 24(3), pages 534-545.
    2. Paul A. Samuelson, 1956. "Social Indifference Curves," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 70(1), pages 1-22.
    3. E. G. West, 1971. "Subsidized But Compulsory Consumption Goods: Some Special Welfare Cases," Kyklos, Wiley Blackwell, vol. 24(3), pages 534-545, August.
    4. Mark V. Pauly, 1970. "Efficiency In The Provision Of Consumption Subsidies," Kyklos, Wiley Blackwell, vol. 23(1), pages 33-57, February.
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    Cited by:

    1. Bruce D. Fitzgerald, 1975. "Self-Interest or Altruism," Journal of Conflict Resolution, Peace Science Society (International), vol. 19(3), pages 462-479, September.
    2. Bruce D. Fitzgerald, 1975. "Notes on the Grants Economy of Foreign Aid," Conflict Management and Peace Science, Peace Science Society (International), vol. 1(2), pages 131-140, February.

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