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Project Aid or Budget Aid? The Interests of Governments and Financial Institutions
Author(s) -
Hefeker Carsten
Publication year - 2006
Publication title -
review of development economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.531
H-Index - 50
eISSN - 1467-9361
pISSN - 1363-6669
DOI - 10.1111/j.1467-9361.2006.00315.x
Subject(s) - interest group , agency (philosophy) , government (linguistics) , normative , economics , bureaucracy , outcome (game theory) , finance , public economics , political science , politics , microeconomics , sociology , social science , linguistics , philosophy , law
The paper compares different aid policy instruments and their effect on the target group. Starting from a situation where interest groups compete for the resources of the government, international financial institutions aim to change the policy outcome. They can either directly support one group or condition their financial help to the government on its policy. Apart from a normative analysis which policy is more adequate to help one group, the paper asks what happens if the aid agency is driven by bureaucratic self‐interest.