We examine the interaction between foreign aid and binding borrowing constraint for a recipient country. We also analyze how these two instruments affect economic growth via non-linear relationships. First of all, we develop a two-country, two-period trade-theoretic model to develop testable...

As is now well documented, aid is given for both political as well as economic reasons. The conventional wisdom is that politically-motivated aid is less effective in promoting developmental objectives. We examine the ex-post performance ratings of World Bank projects and generally find that...

When do opposition groups decide to mount a terrorism campaign and when do they enter an open civil conflict against the ruling government? This paper models an opposition group's choice between peace, terrorism, and open conflict. Terrorism emerges if executive constraints are intermediate and...

In their survey of the literature on ethnic fractionalization and economic performance, Alesina and La Ferrara (JEL 2005) identify two main directions for future research. One is to improve the measurement of diversity and the other to treat diversity as an endogenous variable. This paper tries...

This paper examines both the determinants and the effects of changes in the rigidity of labor market legislation across countries over time. Recent research identifies the origin of the legal system as being a major determinant of the cross-country variation in the rigidity of employment...

If society's goal is to increase people's feelings of well-being, economic growth in itself will not do the job. Full employment and a generous and comprehensive social safety net do increase happiness. Such policies are arguably affordable not only in higher income nations but also in countries...

This paper shows how the hedonic approach to vineyard site selection can be used in the adaptation of vineyard land to climate change, natural disasters or other exogenous events. The basic idea is that, if the relation between weather and grape quality is known for each grape type in existing...

The typical identification strategy in aid effectiveness studies assumes donor motives do not influence the impact of aid on growth. We call this homogeneity assumption into question, first constructing a model in which donor motives matter and then testing the assumption empirically. -- Aid ;...

In 1998, the Good Friday Agreement concluded a period of violence in Northern Ireland yet the scars of the conflict remained prevalent in the political landscape. Rival communities remained divided, economic performance was poor and intercommunity tensions frequently manifested. In a bid to...

International donors usually have particular goals they want to achieve with their foreign aid, for example, poverty alleviation. In the international aid story lobbying by potential recipient groups attempting to capture the donor's support play a potentially important role for nongovernmental...