POLS 1200 Lecture Notes - Lecture 3: Remittance, Marshall Plan, Moral Hazard
8 Dec 2015
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Idea of new development bank is to shake up global economy. Key players: brazil, russia, india, china, south africa. Instead of fuckin wit the imf they fuck with the ndb. The ndb is too dominated by the west/ us. Moral hazard: is when good intentions have unintended consequences. Imf acknowledges that there is a danger of a moral hazard. Define foreign aid: two basic ways to define it. Narrow definition development: e,g oecd- organization for economic cooperation and, prosperous countries are usually members, what the oecd focuses on is foreign aid, they use a narrow definition which has 3 characteristics that say. 1. to count as foreign aid the money must start in the public sector [money coming from gov, raised thru taxes etc]. To count as aid it either has to be in the form of a grant or lower interestyou can charge interest but it has to be 25% lower than what the market otherwise would be.
