We analyze how the altruism of an International Financial Institution (IFI) towards its Low-Income member Countries (LICs) alters the effectiveness of its loans. We study IFI loans to a credit-constrained LIC. The IFI's repayment policy is determined by the interplay of its concerns for the...

The econometric literature has been unable to establish a robust association between foreign aid and growth and poverty reduction. In this paper, we argue that aid effectiveness must be assessed using methods that go beyond cross-country regressions. We calibrate a dynamic general equilibrium...

This paper examines the theoretical presumption that private school vouchers will increase the quality of education in public and private schools. Even in simple models that assume public education is plagued by X-inefficiency or budger-maximizing administrators, the effect of vouchers on...