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Conditionality and Endogenous Policy Formation in a Political Setting

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  • S Mansoob Murshed

Abstract

The paper examines two issues associated with aid and fiscal policy. First, how best the conditionality behind foreign aid, sometimes non-economic, is complied with in a principal-agent framework. In a multiple task and multiple principal framework, principals are better off cooperating and making the agent’s efforts more complementary. Secondly, endogenous policy formation in the context of domestic politics is examined. This involves interaction between policy makers and domestic special interest groups. Outside donors need to be aware of these processes, so that they can ultimately influence it. Three endogenous policy processes: median voter, lobbying, and a combination of political contributions as well as altruism are also examined. [Discussion Paper No. 2001/92].

Suggested Citation

  • S Mansoob Murshed, 2008. "Conditionality and Endogenous Policy Formation in a Political Setting," Working Papers id:1818, eSocialSciences.
    • Handle: RePEc:ess:wpaper:id:1818
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