When foreign aid undermines institutional development aid recipients can exhibit the symptoms of aid "dependence" - benefiting from aid in the short term but damaged by it in the long term. The authors find that one equilibrium outcome can be high aid and weak institutions, even when donors and...

When foreign aid undermines institutions, countries can become aid-dependent - even if donors and recipients have the best intentions.When foreign aid undermines institutional development, aid recipients can exhibit the symptoms of aid dependence - benefiting from aid in the short term but...