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What Determines the Suspension of Budget Support?

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  • Molenaers, N.
  • Gagiano, A.
  • Smets, L.
  • Dellepiane, S.

Abstract

Although Budget Support (BS) was not designed to push political reform in recipient countries, donors have nonetheless used it to sanction democratic regress. An econometric analysis of all BS suspensions by bilateral donors in the period 2000–11 finds that suspensions effectively do reflect downward tendencies in voice and accountability, and in level of democratic functioning. The larger the in-country BS donor group, the more suspensions. Interestingly, ideological alignment between donor and recipient and aid dependence decrease the likelihood for suspensions, while domestic donor economic growth increases it; and multilateral suspensions have the largest positive effect of all.

Suggested Citation

  • Molenaers, N. & Gagiano, A. & Smets, L. & Dellepiane, S., 2015. "What Determines the Suspension of Budget Support?," World Development, Elsevier, vol. 75(C), pages 62-73.
    • Handle: RePEc:eee:wdevel:v:75:y:2015:i:c:p:62-73
    DOI: 10.1016/j.worlddev.2014.09.025
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    3. Hackenesch, Christine & Leininger, Julia & Mross, Karina, 2020. "What the EU should do for democracy support in Africa: Ten proposals for a new strategic initiative in times of polarisation," IDOS Discussion Papers 14/2020, German Institute of Development and Sustainability (IDOS).
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    5. Roel Dom & Lionel Roger, 2018. "Economic sanctions and domestic debt: Burundi's fiscal response to the suspension of budget support," Discussion Papers 2018-12, University of Nottingham, CREDIT.
    6. de Felice, Damiano, 2015. "Diverging Visions on Political Conditionality: The Role of Domestic Politics and International Socialization in French and British Aid," World Development, Elsevier, vol. 75(C), pages 26-45.
    7. Del Biondo, Karen, 2015. "Donor Interests or Developmental Performance? Explaining Sanctions in EU Democracy Promotion in sub-Saharan Africa," World Development, Elsevier, vol. 75(C), pages 74-84.
    8. Portela, Clara & Mora-Sanguinetti, Juan S., 2023. "Sanctions effectiveness, development and regime type. Are aid suspensions and economic sanctions alike?," World Development, Elsevier, vol. 172(C).
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    10. Felix Haass, 2021. "The democracy dilemma. Aid, power-sharing governments, and post-conflict democratization," Conflict Management and Peace Science, Peace Science Society (International), vol. 38(2), pages 200-223, March.
    11. Jin Mun Jeong, 2020. "Economic sanctions and income inequality: impacts of trade restrictions and foreign aid suspension on target countries," Conflict Management and Peace Science, Peace Science Society (International), vol. 37(6), pages 674-693, November.

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