Trade preferences are a central issue in ongoing efforts to negotiate further multilateral trade liberalization. “Less preferred” countries are increasingly concerned about the discrimination they confront, while “more preferred” developing countries worry that WTO-based liberalization of trade will erode the value of current preferential access regimes. This tension suggests there is a politic...

To analyze ways in which aid can be made more effective, we develop a growth model in which aid finances infrastructure investment and pro-poor spending. We assume that the recipient countries are aid-dependent in the early phase of development and ultimately become independent. In the model, donors can accelerate the independence of a recipient from aid by investing in infrastructure. We demon...

There is a growing consensus that aid has not improved economic growth and market institutions among developing nations (Boone 1996, Knack 2001, Collier and Hoeffler 2004, Heckelman and Knack 2008, Rajan and Subramanian 2008). Far less attention has been paid so far to the ability of aid to promote and support democratization. The effect of foreign aid on democratization is theoretically ambigu...

This short paper explores the complementarity between foreign aid and foreign direct investment (FDI). Recent studies on aid concluded that aid should come to an end or be reduced with a radical modification of the terms and conditions and FDI and trade should replace aid as the engine of development. In this paper, we argue that aid complements FDI and advances the efficacy of FDI in promoting...

This study assesses the relevance of poverty in the determination of aid volumes. In particular, it investigates whether donors’ decisions about aid volumes are more reactive to changes in domestic poverty than to those in the poverty of prospective aid recipients. This is particularly relevant at times of economic crisis, which may seriously affect the proportion of donors’ budgets that is dev...

We study the influence of economic inequality on co-operation and aid distribution in community-based development schemes. For this, we organized a field experiment in which community members contributed to a collective effort to attract aid. We find that devolving aid distribution to community representatives increases the aid attracted, but that this benefits community representatives only. A...

This study empirically examines the causal relationships between foreign aid (ODA) and economic development for India and Sri Lanka using the annual data 1960-61 to 2010-11. Both India and Sri Lanka need to maintain high growth to create more employment opportunity and to reduce poverty. Considering the long run causal linkage among foreign aid, trade performance, financial sector development, ...

This paper shows that foreign aid in postwar Lebanon passed through two phases with distinct features that have had far reaching implications for postwar development. In the first phase lasting from 1992-97, foreign aid was mainly channelled towards providing resources for postwar reconstruction projects. The second phase from 1997 to the present witnessed a qualitative shift in foreign aid uti...