Why do donor countries give foreign aid? The answers found in the literature are: (i) because donor countries care for recipient countries (e.g. altruism), and/or (ii) because there exist distortions that make the indirect gains from foreign aid (e.g. terms of trade effects) to be larger than...

This paper develops a lobbying-by-firms model that draws on a more realistic characterization of the lobbying process; influence-seeking requires both money to 'buy access' and managerial time to 'utilize access'. This, more realistically grounded, modeling approach furnishes theoretical support...

The paper presents a model where the median voter in the donor country determines the support of foreign aid. It is first established that an individual in the donor country is affected by the direct benefits (due to altruism) and costs (due to taxes) of giving aid, and by the indirect benefits...

This paper demonstrates that voluntary export restraints may be socially desirable to upgrade the quality of export products. When informational externalities in the recognition of quality result in suboptimal production of quality by competitive firms and the enforcement of socially desirable...

The leading political-economy-of-trade models are virtually silent on two fundamental questions raised by Rodrik in 1995. Why are trade policies systematically biased against trade? And why are tariffs rather than more efficient production subsidies adopted to redistribute income? This paper...

International Financial Institutions (IFIs) tie resource transfers to capital-scarce countries to improvements in their economic policies and institutions. The objective of this assistance is twofold: to augment the recipient's capital base and to improve its allocation of resources. This paper...