@techreport{Scholl2005effectiveness,
abstract = {This paper analyzes optimal foreign aid policy in a neoclassical framework with a conflict of interest between the donor and the recipient government. Aid conditionality is modelled as a limited enforceable contract. We define conditional aid policy to be self-enforcing if, at any point in time, the conditions imposed on aid funds are supportable by the threat of a permanent aid cutoff from then onward. Quantitative results show that the effectiveness of unconditional aid is low while self-enforcing conditional aid strongly stimulates the economy. However, increasing the welfare of the poor comes at high cost: to ensure aid effectiveness, less democratic political regimes receive permanently larger aid funds.},
address = {Berlin},
author = {Almuth Scholl},
copyright = {http://www.econstor.eu/dspace/Nutzungsbedingungen},
keywords = {E13; F35; O11; O19; 330},
language = {eng},
number = {2005,054},
publisher = {SFB 649, Economic Risk},
title = {Aid effectiveness and limited enforceable conditionality},
type = {SFB 649 discussion paper},
url = {http://hdl.handle.net/10419/25073},
year = {2005}
}
