We try to explain why economic conflicts and illegal business often take place in poor countries. We use the concept of subsistence level of consumption (d) and assume a regular concave utility function for consumption levels higher than d. For consumption levels lower than d utility is constant...

We modify the standard trade model introducing the possibility of biased technological changes. This model help to explain the falling labor shares as well as the mixed changes in skill premium in developing countries after trade liberalization takes place

Using a panel of up to 116 countries from 1970-2010 we estimate the effects of foreign aid flows on a variety of measures of institutional quality. We find that aid flows are associated with the deterioration of both political and economic institutions. Regarding the latter, aid flows are...

A number of political economy concerns are associated with the provision of foreign aid to developing economies. These concerns suggest that foreign aid is likely to have harmful effects on a recipient's institutional quality; also that attempts to give aid conditional on policy and...