Publications [#18424] of Edward Tower

Papers Published

1. Kiyoun Han and E. Tower, "Cost Benefit Analysis of Foreign Aid for a Highly Distorted Economy: The Case of Sudan,", in Foreign Aid: New perspectives, Recent Economic Thought, edited by Kanhaya Gupta (1999), Kluwer Academic Publishers (series edited by William Darity, Jr. and Warren J. Samuels.)
   (last updated on 2004/01/13)

   Abstract:
   How beneficial is foreign aid? This is a fairly simple question in an undistorted economy. In a highly distorted economy like the Sudan sorting out the interaction of foreign aid with the distortions is important. How the foreign aid ultimately affects economic welfare (the shadow price of foreign aid) depends on what policies are used to obtain international and fiscal balance. Moreover, the granting of foreign aid is often conditional upon economic reform of various sorts; part of a foreign aid package may be in kind. Evaluation of such a foreign aid package requires determination of the marginal social value of the accompanying reforms as well as the shadow price of the foreign exchange and commodities included in the foreign aid package. This paper develops a simple four sector linearized general equilibrium model of the Sudan in order to perform the requisite cost benefit analysis. It finds that the spfa depends strongly on how the fiscal authority adjusts to the foreign aid, the economic reforms required, and the form taken by the aid.