Is generalized debt relief an effective development strategy, or should assistance be tailored to countries' characteristics? To answer this question, the authors build a simple model in which recipient governments reveal their creditworthiness if donors offer them to choose between aid and debt...

The Macroeconomic Aid Effectiveness Literature (Macro AEL) has had a resounding effect both within the academic community and within the policy arena where its policy recommendations carry substantial weight. Although the empirical aspect of this literature has received substantial scrutiny, the...