Aid's impact on democracy

Miguel Niño-Zarazúa, Ana Horigoshi and Rachel M. Gisselquist
Additional contact information
Miguel Niño-Zarazúa: Department of Economics, SOAS University of London & United Nations University - World Institute for Development Economics Research (UNU-WIDER)
Ana Horigoshi: Universite Paris Dauphine/PSL
Rachel M. Gisselquist: United Nations University - World Institute for Development Economics Research (UNU-WIDER)
Authors registered in the RePEc Author Service: Miguel Angel Niño-Zarazúa

No 248, Working Papers from Department of Economics, SOAS University of London, UK

Abstract: This paper investigates the impact of foreign aid on democratic outcomes using a panel of countries for the period between 1995 and 2018. In so doing, it speaks to a major critique of foreign aid, which is that it negatively impacts democratic governance. The analysis distinguishes between developmental aid and democracy aid, and examines democracy aid to specific sectors, in order to explore variation across different aid types. It draws on the Organisation for Economic Co-operation and Development’s (OECD) Creditor Reporting System (CRS) data on foreign aid and indices of democracy from the Varieties of Democracy project, employing a combination of a maximum likelihood estimation and structural equation modelling (ML-SEM) model and fixed effects models. Overall, using a more extensive set of data and methods than previous analyses, we offer comprehensive evidence pointing to aid having a positive if modest impact on democratic outcomes. Our analysis suggests this effect is more significant for democracy aid than developmental aid, but there is no evidence of negative impact for either. These results are robust to multiple specifications

Keywords: foreign aid; democracy; development (search for similar items in EconPapers)
JEL-codes: D72 F35 F55 (search for similar items in EconPapers)
Pages: 91
Date: 2022-02
New Economics Papers: this item is included in nep-dev and nep-pol
References: View references in EconPapers View complete reference list from CitEc
Citations:

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
Working Paper: Aid's impact on democracy (2022)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:soa:wpaper:248

Access Statistics for this paper

More papers in Working Papers from Department of Economics, SOAS University of London, UK Contact information at EDIRC.
Bibliographic data for series maintained by Chandni Dwarkasing ().