@article {Lahiri:July 2004:0954-1985:213,
	author = "Lahiri S.",
	author = "Raimondos-Moller P.",
	title = "Donor Strategy under the Fungibility of Foreign Aid",
	journal = "Economics and Politics",
	volume = "16",
	year = "July 2004",
	abstract = "We develop a political–economic model of aid fungibility: a part of aid is diverted away from its intended target by lobby groups. The size of this diversion – the degree of aid fungibility – is determined endogenously by the recipient government. The donor can affect the equilibrium degree of fungibility by choosing both the size of aid and the timing of its decision. We derive a condition under which the donor's reaction to fungibility is to reduce the amount of aid. Under this condition, if the donor acts as a follower, both the donor and the target group are better off.",
	pages = "213-231(19)",
	url = "http://www.ingentaconnect.com/content/bpl/ecpo/2004/00000016/00000002/art00005"
	doi = "doi:10.1111/j.1468-0343.2004.00138.x"
}