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An Equal-Opportunity Approach to the Allocation of International Air

  • John Roemer
  • Humberto G. Llavador

    (Department of Economics, University of California Davis)

How should international aid be distributed? The most common view is according to some utilitarian formula: in order to maximize the average growth rate of aid recipients or the growth rate of income of the class of recipient countries. Recently, the World Bank [7] has published a study demonstrating the importance of good economic management, within a recipient country, in transforming aid into economic growth. We identify good economic management with e ort, and ask, how should aid be distributed to equalize opportunities [among recipient countries] for achieving growth, according to Roemer''s [5] theory of equal opportunity. In addition, we calculate how aid should be distributed according to a utilitarian view. Both the equal-opportunity and utilitarian recommendations are less compensatory than actual aid policy (they would give less to many African countries than present policy does). We discuss the results.

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Paper provided by University of California, Davis, Department of Economics in its series Working Papers with number 9910.

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Length: 26
Date of creation: 16 Jan 2003
Date of revision:
Handle: RePEc:cda:wpaper:99-10
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  1. Collier, Paul & Dollar, David, 1999. "Aid allocation and poverty reduction," Policy Research Working Paper Series 2041, The World Bank.
  2. Chang, Charles C. & Fernandez-Arias, Eduardo & Serven, Luis, 1999. "Measuring aid flows : a new approach," Policy Research Working Paper Series 2050, The World Bank.
  3. Stephen Knack & Philip Keefer, 1995. "Institutions And Economic Performance: Cross-Country Tests Using Alternative Institutional Measures," Economics and Politics, Wiley Blackwell, vol. 7(3), pages 207-227, November.
  4. Jeffrey Sachs & Andrew Warner, 1995. "Economic Reform and the Progress of Global Integration," Harvard Institute of Economic Research Working Papers 1733, Harvard - Institute of Economic Research.
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