The response of an economy to a windfall of foreign exchange (be it aid or natural resource revenues) is often …

Using a model of probabilistic voting, we analyse the impact of aid on the political equilibrium in the recipient … aid on the political equilibrium and therefore on the quality of the policy (using the utilitarian social welfare as a … quality by aid can help to explain the poor performance of conditionality in improving policy. Perhaps more surprising is the …

Where imports are financed predominantly by rents from resource extraction or aid, the revenue generated by tariffs is … illusory. Revenue earned by the tariff is offset by a reduction in the real value of aid and resource rents. Revenue is however … moved between accounts in the government budget, which, in the case of aid, may reduce the burden of donor conditionality …

The paper surveys the interactions between aid and trade, distinguishing between policies and outcomes as well as … between various instruments. It first discusses the theoretical literature, focusing on the causal impact of aid on the …

We construct an open economy disequilibrium model to assess the welfare effects of aid in different macroeconomic … regimes. Aid is shown to have different effects in different unemployment regimes because it increases the social costs of …

that they give only marginal trade preference to the CEECs. The paper also considers FDI and aid flows and argues that …