We develop a theoretical model of foreign aid to analyse a method of disbursement of aid which induces the recipient government to follow a more pro-poor policy than it otherwise would do. In our two-period model, aid is given in the second period and the volume of it depends on the level of...

Countries compete with one another for funds distributed by nongovernment organizations (NGOs). We examine the competition over poverty and governance conducted by a NGO in the allocation of its funds among potential recipient countries. The NGO in its decisionmaking process also takes into...