RT Monograph
SR 00
A1 Auriol, Emmanuelle
A1 Miquel-Florensa, Josepa
T1 Taxing Fragmented Aid to Improve Aid efficiency
YR 2015
FD 2015-08-31
VO 15-600
SP 36
K1 Aid fragmentation
K1 incentives
K1 multi-principal
K1 Development
AB We present a model with two donors-principals that provide funds to a unique recipient-agent. Each donor decides how to allocate his aid funds between a pooled and a donor specific unilateral project. Both principals and the agent value the output produced with the principals' pooled and two unilateral funded projects. However the donors have a bias in favor of their own unilateral project, which leads them to over-invest in these projects. The agent establishes a tax on the unilateral projects, which acts as a protection measure against biased allocation by the principals. The optimal tax imposed by the recipient on unilateral projects varies depending on the total amount of aid provided by the donor and on the productivity of his unilateral project. We present empirical support on the donors' preferences for unilateral projects, and how allocations and fragmentation are affected by recipient's characteristics.
T2 TSE Working Paper
PB TSE Working Paper
PP Toulouse
AV Published
LK https://publications.ut-capitole.fr/id/eprint/18485/
UL http://tse-fr.eu/pub/29700