By Hafiz A. Akhand

Even after part a century of labor and lots more and plenty feedback, the using significance of overseas relief exhibits no signal of abating. common and acute poverty nonetheless ravages many nations of the realm, and the knowledge of the way relief impacts the economies of the recipient international locations continues to be faraway from excellent. those elements by myself warrant the exam provided during this book.
The contents of this paintings try and collect many strands of the literature, lots of that are new and feature a relating the topic of reduction yet that have as but no longer chanced on their approach into the mainstream of the literature. This quantity takes a extensive survey and in addition presents a extra particular remedy of components of reduction that experience but to be explored within the present literature.
This publication can function either a reference paintings in addition to a study monograph and will be of use for college kids, in addition to for researchers and coverage makers.

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S. government emerges as a prime explanatory variable" (Ayres, 1983, p. 57). 18 FOREIGN AID What all this boils down to is that there is perhaps less justification for treating the detenninants of aid by individual donor countries and the multilateral institutions than has been made out to be the case in the literature. 2. Brief review of empirical literature There is considerable empirical literature on the detenninants of aid, both bilateral and multilateral, although most studies are concerned with bilateral aid, which is not surprising given that such aid constitutes the overwhelming proportion of total aid.

1987, Frey and Schneider, 1986, Dowling and Heimenz, 1985, Mosley, 1985, and Maizels and Nissanke, 1984 2 See, for example, Maizels and Nissanke, 1984 and Alesina and Dollar, 1998. 3 For example Trumbull and Wall, 1994 find that infant mortality, and not the income per capita of the recipient country, is vital in explaining bilateral aid. Alesina and Dollar, 1998, by contrast, find that while there is a negative relationship between aid flows and income per capita of the recipient country, aid giving is primarily motivated by donor strategic interests and colonial history of the recipient countries.

He then goes on to discuss Modigliani, 1970 and Gupta, 1975 which do use a simultaneous equations approach, but faults them for treating foreign capital inflows as being exogenous. As we shall see in the subsequent chapters, regardless of the shortcomings it may suffer from, the simultaneous equations approach provides far more insight into the effects of aid than does the single equation approach. As the survey by Obstfeld, 1999 shows, the major methodological innovation during the recent years was introduced by Boone, 1995 and Boone, 1996.

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