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Are Democratising Countries Rewarded with Higher Levels of Foreign Aid?

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  • Balázs Szent-Iványi

    (School of Languages and Social Sciences, Aston University, Birmingham, UK
    Department of World Economy, Corvinus University of Budapest, Hungary)

Abstract

The paper examines how flows of foreign aid have reacted to events of democratisation in developing countries. Using a panel dataset of 136 aid-receiving countries between 1980 and 2009, aid allocation regressions reveal that Western donors in general have tended to react to visible, major democratic transitions by increasing aid to the partner country, but no significant increases can be identified in the case of countries introducing smaller democratic reforms. The increases in aid flows are not sustained over time, implying that donors do not provide long-term support to nascent democracies. Also, democratisations in Sub-Saharan Africa do not seem to have been rewarded with higher levels of aid.

Suggested Citation

  • Balázs Szent-Iványi, 2015. "Are Democratising Countries Rewarded with Higher Levels of Foreign Aid?," Acta Oeconomica, Akadémiai Kiadó, Hungary, vol. 65(4), pages 593-615, December.
    • Handle: RePEc:aka:aoecon:v:65:y:2015:i:4:p:593-615
    Note: The author wishes to thank Gábor Rúzsa and the two anonymous referees for their valuable comments. Any remaining errors are those of the author. The research was supported in the framework of the project TÁMOP 4.2.4. A/2-11-1-2012-0001 “National Excellence Program – Elaborating and operating an inland student and researcher personal support system” and co-financed by the European Social Fund.
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    More about this item

    Keywords

    foreign aid; aid allocation; democratisation;
    All these keywords.

    JEL classification:

    • F35 - International Economics - - International Finance - - - Foreign Aid
    • F59 - International Economics - - International Relations, National Security, and International Political Economy - - - Other

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