United Nations peacekeeping operations and multilateral foreign aid: Credibility of good governance

Does hosting UN Peacekeeping Operations (UN PKOs) increase multilateral foreign aid inflows into civil war-affected countries? Under what conditions do UN PKOs make multilateral foreign aid effective, enhancing governance quality? Multilateral foreign aid agencies increasingly focus on good governance as an allocation criterion. However, multilateral aid assistance faces dilemmas when allocating aid since it undermines the credibility of government commitments to good governance. This study argues that UN PKOs mitigate such uncertainty by initiating democratization, capacity-building, and political participation while mitigating political violence, thereby increasing the multilateral aid inflows. In missions involving these initiations, multilateral aid effectively enhances governance quality. These arguments are tested using a sample of countries that have experienced civil wars between 1991 and 2009. The findings suggest that UN PKOs increase the multilateral aid inflows. Moreover, increasing multilateral aid is more effective in improving the governance quality when missions have capacity-building or electoral tasks.