International Public Goods and the Case for Foreign Aid

Rajshri Jayaraman · Ravi Kanbur

58 citations0/0 files storedRePEc: Research Papers in Economics

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International Development and Aid Global trade and economics Economic Policies and Impacts

Abstract

In the presence of international public goods, donors are faced with two instruments whereby recipient utility may be altered -contributions towards the international public good and direct transfers (conventional foreign aid). The self-interested donor's optimal choice of transfer-contributions combinations will typically depend upon the public goods technology. Some technologies call for a corner solution, with either transfers or contributions set to zero, and others are characterised by interior solutions, where the donor's optimal strategy calls for a positive transfers and positive contributions. Whether or not the presence of an international public good strengthens the case for conventional foreign liid transfers is therefore not always obvious.

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1986On the private provision of public goods 1996Politics and the effectiveness of foreign aid 1983From weakest-link to best-shot: The voluntary provision of public goods 1996Aid, Investment and Incentives

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