Rational partition preferences and the equivalence of flypaper and fungibility of foreign aid: An application of Young’s Theorem
Publication Type:Journal Article
Source:Asian Economic Review , Volume 51, Issue 3, p.403-410 (2009)
This paper discusses the political economy implications of external financial assistance in the presence of partisanship in parties. In fact, rational partisan theory posits that parties tend to adapt to the median voter’s alteration in preferences during a given incumbency period so that they could maximize their chances of being re-elected. Our paper specifically tends to illustrate whether parties should be concerned with
flypaper and fungibility of foreign aid while adapting to the dynamic preferences of voters. The Young theorem is used to show under what conditions would flypaper and fungibility have equivalent effects on output.