Lenders condition future loans on some index of past performance. Typically, banks condition future loans on repayments of earlier obligations whilst international organizations (official lenders) condition future loans on the implementation of some policy action ('investment'). We build an...

Charitable giving has increasingly become ‘tough love’ - it has come to require recipients to undertake costly prior action. A common justification is that of greater efficiency: willingness to undertake costly actions signals greater productivity from transfers. However, there is a...