期刊名称：Economics Discussion Papers / Department of Economics, College of Management and Economics, University of Guelph
出版年度：2007
卷号：2007
期号：02
出版社：University of Guelph
摘要：The paper presents a theoretical and empirical analysis of a donor¡¯s choice of the
composition of unrestricted and in-kind/restricted transfers to a recipient and how this
composition is adjusted in response to changes in the moral hazard behavior of the
recipient. In-kind or restricted transfers may be used, among others, to control a
recipient¡¯s moral hazard behavior but may be associated with deadweight losses.
Within the context of foreign aid, we use a canonical political agency model to
construct a simple signaling game between a possibly corrupt politician in a recipient
country and a donor to illustrate the donor¡¯s optimal choice of tied (restricted) and
untied foreign aid. We clarify the condition under which a reduction in the recipient¡¯s
moral hazard behavior (i.e., improvement in the level of governance) leads to a fall in
the proportion of tied aid. We test the predictions of our theoretical analysis using
data on the composition of foreign aid by multilateral and bilateral donors.
关键词：tied foreign aid, governance, moral hazard, political agency, restricted
transfer
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