The paper shows that, under certain conditions, international technical assistance enriches the recipient country through environmental clean up and terms of trade gain. By contrast, it leaves the donor country worse off through terms of trade loss. This is shown by means of a two-country...

Tied aid invites a Pareto-improving situation in the presence of environmental externalities. Under certain conditions, although the aid recipient government's marginal propensity to consume the purchased good is lower or higher than the corresponding marginal propensity of the aid recipient...