We examine the effect of relaxing a binding borrowing constraint for a recipient country on the amount of foreign aid it receives. We do so by developing a two-country, two-period trade-theoretic model. The relaxation of the borrowing constraint reduces the flow of foreign aid, suggesting that...

Compared to foreign grants, do concessional loans from foreign governments and/or unsubsidized loans from foreign private banks lead to faster growth in developing nations? The answer has implications for aid agencies (i) in allocating a given amount of resources between grants and concessional...

This paper estimates the responsiveness of aid to recipient countries' economic and physical needs, civil/political rights, and government effectiveness. We look exclusively at the post-Cold War era and control for the political, strategic, and other considerations of donors with fixed effects....