Ira Gang
Rutgers University
Department of Economics
E-mail: gang@economics.rutgers.edu
Item Number: [J37]
Title: Foreign Aid and Fiscal Behavior in a Bounded Rationality Model:
Different Policy Regimes
Abstract: We examine how the source of foreign aid reflects the composition
of the recipient government's spending. Does the source of aid - bilateral
or
multilateral - influence recipient policy-makers' choice between development
and nondevelopment expenditure? We depart from previous literature by introducing
strong asymmetries in policy-makers' preferences. With the financial constraints
set by foreign aid and domestic revenues, this formalization allows us to
model and estimate the fiscal behavior of government policymakers in the presence
of foreign aid.
Reference: Ira N. Gang and Haider Ali Khan, Foreign Aid and
Fiscal Behavior in a Bounded Rationality Model: Different Policy Regimes,
Empirical Economics, 24 (1999) 121-134.
Co-Author Information:
Haider Ali Khan
Graduate School of International Studies, University of Denver
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