Foreign Aid and Fiscal Behavior in a Bounded Rathionality Model: Different Policy Regimes

Ira Gang and Haider Khan ()

Departmental Working Papers from Rutgers University, Department of Economics

Abstract: We examine how the source of foreign aid affects the composition of the recipient government's spending. Does the source of aid -- bilateral or miltilateral -- influence ricipient policy-makers' choice between development and nondevelopment expenditure? We depart from previous literature by introducing strong asymmetries in policy-maker's preferences. With financial constraints set by foreign aid and domestic revenues, this formalization allows us to model and estimate the fiscal behavior of government policy-makers in the presense of foreign aid.

Keywords: foreign aid; India; international assistance (search for similar items in EconPapers)
JEL-codes: F35 (search for similar items in EconPapers)
Date: 1998-06-10
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Citations: View citations in EconPapers (6)

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Related works:
Journal Article: Foreign aid and fiscal behavior in a bounded rationality model: Different policy regimes (1999)
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Persistent link: https://EconPapers.repec.org/RePEc:rut:rutres:199812

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