Intertemporal Distribution of Foreign Aid
We analyze the dynamic effects of foreign aid on the economic growth and welfare of a recipient countries. Based on an overlapping generations model with a productive capital, foreign aid is characterized by its uses: whether it takes a form of income compensation (income aid) or capital stock (capital aid), and by its recipients: which generation(s) or institution hold(s) its ownership. We found some different results from those of the traditional wisdom of foreign aid. First, foreign aid tends to be less efficient without any condition to the recipient. Second, capital aid can be more efficient than income aid, and its efficiency could be even higher when capital aid is loaned in stead of being granted. Third, a stable relationship between the donors and the recipient may harm the efficiency of foreign aid.
|Date of creation:||Aug 2007|
|Contact details of provider:|| Postal: 11th floor, Annex, Ministry of Economy, Trade and Industry (METI) 1-3-1, Kasumigaseki Chiyoda-ku, Tokyo, 100-8901|
Web page: http://www.rieti.go.jp/
More information through EDIRC
When requesting a correction, please mention this item's handle: RePEc:eti:dpaper:07048. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (NUKATANI Sorahiko)
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.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with 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 profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.