An Equal-Opportunity Approach to the Allocation of International Aid

UC Davis Working Paper No. 99-10

26 Pages Posted: 2 May 2000

See all articles by Humberto Llavador

Humberto Llavador

Universitat Pompeu Fabra - Faculty of Economic and Business Sciences

John E. Roemer

Yale University - Department of Political Science; Yale University - Cowles Foundation

Date Written: August 1999

Abstract

How should international aid be distributed? The most common view is according to some utilitarian formula: in order to maximize the average growth rate of aid recipients or the growth rate of income of the class of recipient countries. Recently, the World Bank [7] has published a study demonstrating the importance of good economic management, within a recipient country, in transforming aid into economic growth. We identify good economic management with effort, and ask, how should aid be distributed to equalize opportunities [among recipient countries] for achieving growth, according to Roemer's [5] theory of equal opportunity. In addition, we calculate how aid should be distributed according to a utilitarian view. Both the equal-opportunity and utilitarian recommendations are less compensatory than actual aid policy (they would give less to many African countries than present policy does). We discuss the results.

JEL Classification: D63, F35

Suggested Citation

Llavador, Humberto and Roemer, John E., An Equal-Opportunity Approach to the Allocation of International Aid (August 1999). UC Davis Working Paper No. 99-10. Available at SSRN: https://ssrn.com/abstract=214128 or http://dx.doi.org/10.2139/ssrn.214128

Humberto Llavador (Contact Author)

Universitat Pompeu Fabra - Faculty of Economic and Business Sciences ( email )

Ramon Trias Fargas 25-27
Barcelona, 08005
Spain
(34) 93 542 23 81 (Phone)
(34) 93 542 17 46 (Fax)

John E. Roemer

Yale University - Department of Political Science ( email )

Box 208269
New Haven, DC 06520-8269
United States
203-432-5249 (Phone)
203-432-6196 (Fax)

HOME PAGE: http://pantheon.yale.edu/~jer39/

Yale University - Cowles Foundation

Box 208281
New Haven, CT 06520-8281
United States

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