IDEAS home Printed from https://ideas.repec.org/p/ags/iprwps/294848.html
   My bibliography  Save this paper

Can Foreign Aid Accelerate Stabilization?

Author

Listed:
  • Casella, Alessandra
  • Eichengreen, Barry

Abstract

This paper studies the effect of foreign aid on economic stabilization. Following Alesina and Drazen (1991), we model ,the delay in stabilizing as the result of a distributional struggle: reforms are postponed because they are costly and each distributional faction • hopes to reduce its share of the cost by outlasting its opponents in obstructing the required policies. Since the delay is used to signal each faction's strength, the effect of the transfer depends on the role it plays in the release of information. We show that this role depends on the timing of the transfer: foreign aid decided and transferred sufficiently early in the game leads to earlier stabilization; but aid decided or transferred too late is • destabilizing and encourages further postponement of reforms.

Suggested Citation

Handle: RePEc:ags:iprwps:294848
DOI: 10.22004/ag.econ.294848
as

Download full text from publisher

File URL: https://ageconsearch.umn.edu/record/294848/files/ipr086.pdf
Download Restriction: no
File URL: https://libkey.io/10.22004/ag.econ.294848?utm_source=ideas
LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
---><---

More about this item

Keywords

;
;

Statistics

Access and download statistics

Corrections

All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ags:iprwps:294848. See general information about how to correct material in RePEc.

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

We have no bibliographic references for this item. You can help adding them by using this form .

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: AgEcon Search (email available below). General contact details of provider: .

Please note that corrections may take a couple of weeks to filter through the various RePEc services.

IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.