Corruption, foreign aid and welfare to the poor

Manmohan Agarwal, Bharat Hazari and Li Xindun

Journal of Economic Policy Reform, 2010, vol. 13, issue 4, 305-312

Abstract: This paper investigates the impact of foreign aid and corruption on the welfare of different classes in an economy that receives aid and uses it to finance a public good. We use a general equilibrium model that consists of three goods and three income classes to derive our results. The most important result we obtain is to show that under certain conditions, aid and corruption immiserize the poor.

Date: 2010
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DOI: 10.1080/17487870.2010.523956

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