Conditionality and Endogenous Policy Formation in a Political Setting

Mansoob Murshed

No DP2001-92, WIDER Working Paper Series from World Institute for Development Economic Research (UNU-WIDER)

Abstract: The paper examines two issues associated with aid and fiscal policy. First, how best the conditionality behind foreign aid, sometimes non-economic, is complied with in a principal-agent framework. In a multiple task and multiple principal framework, principals are better off cooperating and making the agent's efforts more complementary. Secondly, I examine endogenous policy formation in the context of domestic politics. This involves interaction between policy makers and domestic special interest groups.

Keywords: Economic assistance and foreign aid; Economic policy; Fiscal policy; Game theory (search for similar items in EconPapers)
Date: 2001
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Persistent link: https://EconPapers.repec.org/RePEc:unu:wpaper:dp2001-92

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