Klitgaard is talking about accounting, ie, instantaneous currency exchanges where, by definition, the gain on one side of the exchange has to equal the outlay on the other. Your model doesn't look like an accounting model; I suspect you want to talk about something different from what he is talking about - and that you want to talk bout policy implications rather than truisms (which is a good instinct; just not what economists care about when they sit down to talk accounting identities).