Foreign Aid, Wage Inequality, and Welfare for a Small Open Economy with Tourism

被引:10
作者
Chao, Chi-Chur [1 ]
Laffargue, Jean-Pierre [2 ,3 ]
Sgro, Pasquale M. [4 ]
机构
[1] Univ Hong Kong, Shatin, Hong Kong, Peoples R China
[2] Univ Paris 01, F-75231 Paris 05, France
[3] CEPREMAP, Paris, France
[4] Deakin Univ, Fac Business & Law, Burwood 3125, Australia
关键词
NONTRADED GOODS; SMALL COUNTRIES; TIED AID; TRADE; PARADOXES;
D O I
10.1111/j.1467-9396.2010.00906.x
中图分类号
F [经济];
学科分类号
02 ;
摘要
While the welfare effect of foreign aid has been extensively analyzed, the impact on the distribution of income has received less attention. At the same time, there has been recent work on tourism where it is complementary to aid in improving welfare. By combining these two strands, this paper concentrates on wage inequality in developing countries. We find that an increase in aid in the form of tied aid can lower the relative price of nontraded goods. The rent extracted from tourists declines, reducing welfare of domestic residents. In addition, the fall in the nontradable price can widen the wage inequality between skilled and unskilled workers. Thus, increased foreign aid may have detrimental effects on national welfare and the distribution of income. Rising wage inequality is confirmed by numerical simulations.
引用
收藏
页码:454 / 464
页数:11
相关论文
共 25 条
[1]  
AMEGASHIE J, 2007, 1996 CESIFO, P1
[2]  
BELADI H, 1990, J ECON, V29, P155
[3]   THE GENERALIZED THEORY OF TRANSFERS AND WELFARE - EXOGENOUS (POLICY-IMPOSED) AND ENDOGENOUS (TRANSFER-INDUCED) DISTORTIONS [J].
BHAGWATI, JN ;
BRECHER, RA ;
HATTA, T .
QUARTERLY JOURNAL OF ECONOMICS, 1985, 100 (03) :697-714
[4]   Tourism and Income Distribution in East Africa [J].
Blake, Adam .
INTERNATIONAL JOURNAL OF TOURISM RESEARCH, 2008, 10 (06) :511-524
[5]   Tourism and poverty relief [J].
Blake, Adam ;
Arbache, Jorge Saba ;
Sinclair, M. Thea ;
Teles, Vladimir .
ANNALS OF TOURISM RESEARCH, 2008, 35 (01) :107-126
[6]  
Brau R., 2008, Tourism and sustainable economic development- Macroeconomic models and empirical methods
[7]   Aid, policies, and growth [J].
Burnside, C ;
Dollar, D .
AMERICAN ECONOMIC REVIEW, 2000, 90 (04) :847-868
[8]   TOURISM, WELFARE AND DEINDUSTRIALIZATION IN A SMALL OPEN-ECONOMY [J].
COPELAND, BR .
ECONOMICA, 1991, 58 (232) :515-529
[9]   Technology, unemployment, and relative wages in a global economy [J].
Davis, DR .
EUROPEAN ECONOMIC REVIEW, 1998, 42 (09) :1613-1633
[10]  
Feenstra RC, 1996, AM ECON REV, V86, P240