Dynamic Contracting for Development Aid Projects: Mechanism Design and High Performance Computation

Rashid, Salim and Shorish, Jamsheed and Sobh, Nahil (November 2006) Dynamic Contracting for Development Aid Projects: Mechanism Design and High Performance Computation. IHS Economics Series 196

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Abstract or Table of Contents

Abstract: Developing economies share both microeconomic and macroeconomic characteristics which are often unique relative to their more developed counterparts. Indeed, many authors (e.g. Parente and Prescott 2000) have emphasized the role of institutional frictions within developing nations as a major determinant of economic growth (or the lack thereof). We examine one type of institutional friction, concerning the observation and reporting of information, and construct a straightforward dynamic contracting model of foreign donor investment in an aid project. We show that even within a simple class of such models, the dynamic contracting problem rapidly becomes computationally intensive, yet remains manageable when high performance. We argue that the natural modeling, simulation and testing environment to both analyze development aid issues and help generate effective aid policy should involve-indeed, rely upon-high performance computational resources.;

Item Type: IHS Series
Keywords: 'Development aid' 'Dynamic contracts' 'Computation'
Classification Codes (e.g. JEL): G20, C63, D86
Status: Published
Date Deposited: 26 Sep 2014 10:38
Last Modified: 24 Jul 2017 17:12
URI: http://irihs.ihs.ac.at/id/eprint/1735

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