International Public Goods and the Case for Foreign Aid

Rajshri Jayaraman and Ravi Kanbur

No 127684, Working Papers from Cornell University, Department of Applied Economics and Management

Abstract: In the presence of international public goods, donors are faced with two instruments whereby recipient utility may be altered -contributions towards the international public good and direct transfers (conventional foreign aid). The self-interested donor's optimal choice of transfer-contributions combinations will typically depend upon the public goods technology. Some technologies call for a corner solution, with either transfers or contributions set to zero, and others are characterised by interior solutions, where the donor's optimal strategy calls for a positive transfers and positive contributions. Whether or not the presence of an international public good strengthens the case for conventional foreign liid transfers is therefore not always obvious.

Keywords: International; Development (search for similar items in EconPapers)
Pages: 19
Date: 1999-03
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Citations: View citations in EconPapers (17)

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Persistent link: https://EconPapers.repec.org/RePEc:ags:cudawp:127684

DOI: 10.22004/ag.econ.127684

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