Buying influence : aid fungibility in a strategic perspective
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- Discussion papers (SAM) 
I study equilibria of non-cooperative games between an aid donor and a recipient when there is conflict over the allocation of their combined budgets. The general conclusion is that a donor’s influence over outcomes is increasing in the share of the available resources it controls; if this share is large enough, aid is not fungible. The game-theoretic approach to fungibility is contrasted with the traditional non-strategic approach. I argue that the former is superior as it derives final allocations instead of assuming them, making analysis of the sources of influence over outcomes possible.
UtgiverNorwegian School of Economics and Business Administration. Department of Economics