This paper shows that the increased policy-selectivity of aid allocations observed in recent years provides recipient countries an incentive to improve policies. The paper estimates that a change in the World Banks Country Policy and Institutional Assessment policy index from 1.5 to 2 for a...

"In recent years donor countries have committed to dramatic increases in the supply of foreign aid to developing countries. Meeting and sustaining such commitments will require sufficient support among donor country voters and taxpayers. The determinants of public opinion in donor countries on...

"Market-oriented economic policies-reflected in limited economic activity by government, protection of private property rights, sound monetary policy, outward orientation regarding trade and efficient tax and regulatory policy-have been strongly linked to faster rates of economic growth. Foreign...