Foreign Aid and Weakest-Link International Public Goods: An Experimental Study

Posted: 16 Dec 2005 Last revised: 27 Jan 2010

See all articles by Vivian Lei

Vivian Lei

University of Wisconsin at Milwaukee - Economics

Steven James Tucker

University of Waikato Management School - Economics

Filip Vesely

University of Wisconsin at Milwaukee - Economics

Date Written: 2006

Abstract

In this paper, we investigate efficiency differences between income and in-kind transfers as distribution mechanisms of foreign aid to weakest-link international public goods in a laboratory environment. We find that if there is relatively small difference in country size, then income transfers seem to provide a higher provision of the international public good, and thus higher overall welfare level than that of in-kind transfers. However, if there is a large disparity in country size, then in-kind transfers appear to provide a higher level of IPG provision and higher accompanying global welfare.

Keywords: Foreign aid, Public goods, Weakest-link, Neutrality, Experiments

JEL Classification: D70, H41, C90

Suggested Citation

Lei, Vivian and Tucker, Steven James and Vesely, Filip, Foreign Aid and Weakest-Link International Public Goods: An Experimental Study (2006). European Economic Review, Vol. 51, No. 3, 2006, Available at SSRN: https://ssrn.com/abstract=870319

Vivian Lei (Contact Author)

University of Wisconsin at Milwaukee - Economics ( email )

3210 N. Maryland Avenue
Bolton Hall 818
Milwaukee, WI 53211
United States
414-229-6494 (Phone)
414-229-3860 (Fax)

Steven James Tucker

University of Waikato Management School - Economics ( email )

Hamilton
New Zealand

Filip Vesely

University of Wisconsin at Milwaukee - Economics ( email )

3210 N. Maryland Avenue, Bolton Hall 802
Bolton Hall 802
Milwaukee, WI 53211
United States

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Abstract Views
1,077
PlumX Metrics