On the Non-Contractual Nature of Donor-Recipient Interaction in Development Assistance

This paper analyses three issues in strategic donor-recipient interaction motivated by the complexity of the rationale underlying aid. The first is when we have several principals with conflicting objectives. Any one principal cannot offer high powered incentives to the agent to carry out their designated task. The second is to do with the fact that effort associated with ensuring aid effectiveness may concern both principal and agent; the optimal solution to which requires difficult to design cooperative behaviour. Consequently, the contractual type principal-agent relationship between donors and recipients is inappropriate. We need to consider models that signal recipient quality or commitment to reform. A simple model of signalling with commitment problems is presented, along with extensions to multiple types of agents and time periods, as well as possible solutions involving mechanism design.aid, conditionality, contracting, signalling quality, mechanism design

Strategic Interaction and Donor Policy Determination in a Domestic Setting

aid effectiveness, political processes, endogenous policy formation

Indivisibility, Fairness, Farsightedness and their Implications for Security

fair division, commitment, peace treaties, terrorist motivation

Tax Competition, Globalization and Declining Social Protection

Tax competition, Fiscal policy, Social protection, Political processes

Conditionality and Endogenous Policy Formation in a Political Setting

aid conditionality, fiscal policy, political processes, endogenous policy formation

Bandwidth Borrowing Schemes for Instantaneous Video-on-Demand Systems

A controlled multicast scheme provides instantaneous service, but limited server bandwidth causes some user requests to be either delayed or rejected when insufficient free bandwidth is available. Two borrowing schemes are proposed for instantaneous video-on-demand (VOD) that reduce the user request blocking rate by borrowing bandwidth from ongoing video streams when there is insufficient free bandwidth for the server to deliver a new video stream. Both these new schemes have proved to be successful in reducing blocking rate and increasing bandwidth utilization at the expense of temporarily degrading the video quality

Trade Policy, Openness, Institutions

This paper examines the importance of institutions vis-à-vis openness and trade policies in determining per capita income differences across countries. Recent literature has tried to demonstrate that more open economies grow faster. On the other hand, it has also been asserted that it is not openness per se but institutions and good governance that matter in promoting growth. This paper attempts to test this hypothesis across a crosssection of nations. Unlike other papers in the field, we have tested not only for the degree of openness but also for trade policy indicators, as well as a fuller set of six institutional variables. Our broad finding is that although institutions matter, trade policies are also relevant to promoting growth, whereas openness per se has little impact on growth.International Integration, Economic Development

Beyond Institutionalism: There Lies a Good Set of Trade Policies

The purpose of this paper is to empirically examine the contribution of trade liberalisation to differences in the level of prosperity across nations. We compare this with the relative contribution of institutional capacity to prosperity, as well as the role of human capital accumulation in that respect. We employ several concepts of institutional quality, trade policy and openness variables following various definitions prevalent in the literature. Unlike in the comparable study by Rodrik et al (2004) we have (a) included a role for human capital, (b) employed six institutional variables compared to one only in Rodrik et al (rule of law), (c) included trade policy variables, and not just openness indicators and (d) expanded the set of openness measures employed. We discover that opening up domestic markets to foreign competition by removing trade restrictions and barriers may be good for economic performance. Secondly, developing human capital is as important as superior institutional functioning for economic wellbeing. We find that openness counts for little per se in explaining income differences across countries. This is because it is an outcome and not a cause. Trade policies, and liberalisation, on the other hand, are not insignificant in explaining cross-country per-capita income variation. With regard to trade policies, export taxes are the most important in explaining cross-country per-capita income differences.Economic Growth, Institutions, International Trade

The Fiscal Dimensions of Conflict and Reconstruction

conflict, fiscal policy, Sub-Saharan Africa

India and Pakistan: Trading for Peace

Are shared democratic values the most important factors in promoting peace between countries, or common economic interests? New econometric research shows that, in the case of India and Pakistan, trade with other countries increases the chance of peace.Inter-state conflict and trade, democracy and conflict, conflict and economic development