IDEAS home Printed from https://ideas.repec.org/p/ihs/ihsesp/196.html
   My bibliography  Save this paper

Dynamic Contracting for Development Aid Projects. Mechanism Design and High Performance Computation

Author

Listed:
  • Rashid, Salim

    (Department of Economics, University of Illinois at Urbana-Champaign)

  • Shorish, Jamsheed

    (Department of Economics and Finance, Institute for Advanced Studies, Vienna, Austria)

  • Sobh, Nahil

    (National Center for Supercomputing Applications, University of Illinois at Urbana-Champaign)

Abstract

Developing economies share both microeconomic and macroeconomic characteristics which are often unique relative to their more developed counterparts. Indeed, many authors (e.g. Parente and Prescott 2000) have emphasized the role of institutional frictions within developing nations as a major determinant of economic growth (or the lack thereof). We examine one type of institutional friction, concerning the observation and reporting of information, and construct a straightforward dynamic contracting model of foreign donor investment in an aid project. We show that even within a simple class of such models, the dynamic contracting problem rapidly becomes computationally intensive, yet remains manageable when high performance. We argue that the natural modeling, simulation and testing environment to both analyze development aid issues and help generate effective aid policy should involve–indeed, rely upon–high performance computational resources.

Suggested Citation

  • Rashid, Salim & Shorish, Jamsheed & Sobh, Nahil, 2006. "Dynamic Contracting for Development Aid Projects. Mechanism Design and High Performance Computation," Economics Series 196, Institute for Advanced Studies.
  • Handle: RePEc:ihs:ihsesp:196
    as

    Download full text from publisher

    File URL: http://www.ihs.ac.at/publications/eco/es-196.pdf
    File Function: First version, 2006
    Download Restriction: no

    References listed on IDEAS

    as
    1. David Roodman, 2004. "An Index of Donor Performance," Working Papers 42, Center for Global Development.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    Development aid; Dynamic contracts; Computation;

    JEL classification:

    • G20 - Financial Economics - - Financial Institutions and Services - - - General
    • C63 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computational Techniques
    • D86 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Economics of Contract Law

    NEP fields

    This paper has been announced in the following NEP Reports:

    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:ihs:ihsesp:196. 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: (Doris Szoncsitz). General contact details of provider: http://edirc.repec.org/data/deihsat.html .

    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 CitEc recognized a reference but did not link an item in RePEc 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 RePEc Author Service 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.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.