The aim of this survey is to explain the real impact of aid on governance in the developing countries: including the sub-sahara and the MENA region during the period 1990-2004 by using the ʻthreshold theoryʼ. Stephen Knack proved that foreign aid tends a harmful impact on governance of the...

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...

Recent data advances have opened exciting new avenues for analyzing the political economy of foreign aid. Recent papers have looked at the social, environmental or welfare implications of aid. This paper, however, combines geo-referenced data on foreign aid with a similarly coded dataset of FDI...

This paper provides a critical review of the recent research on aid effectiveness. It argues that there is an enormous disjunction between research on aid effectiveness and current policies and practices: in particular, recent empirical research efforts have spawned a large body of work that is...

We model the aid allocation decision where the donor government has announced that good governance is the criterion for receiving aid. Potential recipients must compete for the aid funds. The structure of the competition is important to the donor in terms of achieving good governance, and to the...

The literature has identified that countries with higher levels of openness tend to present a larger government sector as a way to reduce the risks to the economy that openness entails. This paper argues that there are a number of policies that can mitigate trade-induced risks, many of which do...

This paper presents a theoretical framework to understand the impact of foreign bank entry on the access to and the price of credit for different types of firms. A major point of departure from the previous literature is that incumbents' information about firms is endogenous in the model;...

Measuring the impact of political risk on investment projects is one of the most vexing issues in international business. One popular approach is to assume that the sovereign yield spread captures political risk and to augment the project discount rate by this spread. We show that this approach...

Using a theoretical model that incorporates asymmetric information and differing comparative advantages among lenders, this paper analyzes the impact of lender entry on credit access and aggregate net output. The model shows that lender entry has the potential to create a segmented market that...

This paper examines the link between real exchange rate volatility and domestic investment by using panel data cointegration techniques. We study the empirical connection between real effective exchange rate volatility and investment for 51 developing countries (23 low-income and 28...