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Please use this identifier to cite or link to this item: http://hdl.handle.net/10202/155

Title: Company interests and foreign aid policy: Playing donors out against each other
Authors: Villanger, Espen
Keywords: Triadic
Conditionality
Foreign aid
Foreign assistance
JEL classification: E61, F35
Issue Date: 2003
Publisher: Chr. Michelsen Institute
Series/Report no.: CMI Working paper
WP 2003: 5
Abstract: Despite the importance attached to conditionality by the donors, and the fact that aid is a crucial income source for the recipient, it is found that conditionality fails. One explanation for this failure could be that a halt in aid could trigger the recipient to cancel contracts with companies from donor countries, which creates incentives for the companies to put pressure towards aid disbursement. We use a multi-agent triadic model of the relationships between a recipient and two donors and two companies to illustrate that recipients may use contracts strategically to make companies influence the disbursement decision to avoid implementing the donors’ conditions. Failing to take account of the companies’ role yields the opposite result in this model, i.e., conditionality becomes successful.
URI: http://hdl.handle.net/10202/155
ISBN: 82-8062-051-6
ISSN: 0804-3639
Appears in Collections:CMI Collection (Reports, Working Papers, Articles etc.)

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