What determines the type and quantity of overseas aid given by individual donor countries? Answers to this question in the existing literature are polarized into two groups. One of them offers a theoretical treatment based on the theory of public goods which is not consistent with the available data, and the other offers empirical correlations without any explanatory theory. The first group-for example, Pincus and Olson and Zeckhauser-treats aid, like defense, as an "international public good." Small countries, on this approach, are free riders, spending relatively little themselves while deriving benefits from the expenditures of larger countries.' But this approach is not consistent with even a casual scrutiny of the OECD aid community in which, broadly speaking, the smallest countries are the most generous donors.2 The second group-for example, Hoadley and Beenstockdiscover correlations between a country's ratio of aid to GNP and certain independent variables which may be expected to influence it (e.g., that country's GNP, its dependence on foreign trade, its government's position in the ideological spectrum, and the state of the domestic economy).3 However, these findings are not fitted into any theoretical framework, so that it is difficult to work out what they really mean.4 The approach of this paper is to treat foreign aid as a public good for which there is a market, albeit a highly imperfect one because the consumers-donor country taxpayers-are ignorant about the very nature, let alone the price, of the commodity they are buying. On this view, factors on the demand side (i.e., taxpayers' response to their country's aid program) will help to determine the quantity of aid disbursed as well as factors on the supply side such as the donor government's desire to obtain strategic or trading benefits from aid. This view