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Foreign Aid and Policy Concessions

Author

Listed:
  • Bruce Bueno de Mesquita

    (Wilf Family Department of Politics, New York University, New York City)

  • Alastair Smith

    (Wilf Family Department of Politics, New York University, New York City)

Abstract

We model foreign-aid-for-policy deals, assuming that leaders want to maximize their time in office. Their actions are shaped by two political institutions, their selectorate and winning coalition. Leaders who depend on a large coalition, a relatively small selectorate, and who extract valuable policy concessions from prospective recipients are likely to give aid. Prospective recipients are likely to get aid if they have few resources, depend on a small coalition and a large selectorate, and the policy concession sought by the donor is not too politically costly. The amount of aid received, if any, increases as the recipient leader's coalition increases, the selectorate decreases, the issue's salience increases, and the domestic resources increase. The theory explains why many Third World people hate the United States and want to live there. Empirical tests using the U.S. Agency for International Development data for the post—World War II years support the model's predictions.

Suggested Citation

  • Bruce Bueno de Mesquita & Alastair Smith, 2007. "Foreign Aid and Policy Concessions," Journal of Conflict Resolution, Peace Science Society (International), vol. 51(2), pages 251-284, April.
    • Handle: RePEc:sae:jocore:v:51:y:2007:i:2:p:251-284
    DOI: 10.1177/0022002706297696
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    References listed on IDEAS

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