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Aid and institutions in transition economies

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  • Askarov, Zohid
  • Doucouliagos, Hristos

Abstract

We investigate whether aid contributed to institutional development in transition economies. We find that aid flows have a positive effect on democratization, especially on constraints on the executive and political participation. At the same time, total aid has no effect on overall quality of governance, while US aid appears to have a negative impact on some dimensions of governance. Aid’s differential impact on democracy and governance is consistent with uneven development of institutions and the democracy consolidation hypothesis. We also find that aid has a non-linear effect on democracy. Openness has a positive effect on both democracy and good governance. Oil resources have an adverse effect on democracy. Adult mortality, civil war and adherence to Islam are all detrimental to good governance.

Suggested Citation

  • Askarov, Zohid & Doucouliagos, Hristos, 2015. "Aid and institutions in transition economies," European Journal of Political Economy, Elsevier, vol. 38(C), pages 55-70.
    • Handle: RePEc:eee:poleco:v:38:y:2015:i:c:p:55-70
    DOI: 10.1016/j.ejpoleco.2015.01.001
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    7. Dijkstra, Geske, 2018. "Aid and good governance: Examining aggregate unintended effects of aid," Evaluation and Program Planning, Elsevier, vol. 68(C), pages 225-232.
    8. Valeria A. Arsenyevа & Svetlana A. Litvinova & Valentina N. Parakhina & Zinaida N. Kozenko & Mikhail Y. Denisov, 2016. "Innovational Development for Transitional Economy – Russia Case Study," Contemporary Economics, University of Economics and Human Sciences in Warsaw., vol. 10(4), December.
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    10. Arif, Imran & Hall, Joshua C., 2019. "International flows of people and institutional change," European Journal of Political Economy, Elsevier, vol. 58(C), pages 276-288.
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    More about this item

    Keywords

    Aid; Institutions; Democracy; Governance;
    All these keywords.

    JEL classification:

    • F35 - International Economics - - International Finance - - - Foreign Aid
    • O5 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies

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