A situation is analysed in which two countries negotiate the financing of the incremental costs which accrue if one of them switches from a non-sustainable onto a sustainable development path. The other country's incentive to pay arises as it benefits from the developing country's environmental...

Funding developing countries' climate policies after Cancun (COP16) has a dual goal: firstly, to support mitigation of developing countries in order to sustain the two-degree pathway of stabilising the global mean temperature; secondly, to empower the vulnerable countries in low-income regions to...

The paper develops a model in which a country with better technology for abatement of Green House Gas (GHG) emission (the North) commits to an international protocol to keep the global GHG emission within a specified limit while it helps the mitigation effort in the other country (the South)...

Charitable giving has increasingly become ‘tough love’ - it has come to require recipients to undertake costly prior action. A common justification is that of greater efficiency: willingness to undertake costly actions signals greater productivity from transfers. However, there is a...

The paper presents a theoretical and empirical analysis of a donor's choice of the composition of unrestricted and in-kind/restricted transfers to a recipient and how this composition is adjusted in response to changes in the moral hazard behavior of the recipient. In-kind or restricted...

An effective policy scheme to overcome the suboptimal low provision levels of global public goods is developed in this paper. By suggesting a decentralized approach to raise environmental public good provision levels we take account of the lack of a coercive global authority that is able 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...

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...

This paper analyses three issues in strategic donor-recipient interaction motivated by the complexity of the rationale underlying aid. The first is when we have several principals with conflicting objectives. Any one principal cannot offer high powered incentives to the agent to carry out their...