The Aid Migration Trade-Off

Abstract

This paper brings out an empirically significant tradeoff between the aid flows delivered by donor countries and the inflow of migrants that they get from developing countries.It draws its implications for aid policy from a simple game-theoretic model, after reviewing the recent literature on the effects and motivations of foreign aid to developing countries.It is part of the recent effort made by economists for uncovering the hidden agenda behind foreign aid that was triggered by the dead end in which the "aid-ineffectiveness" literature has cornered itself.

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