Breaking the wave of democracy: The effect of foreign aid on the incumbent's re-election probability
AbstractWe investigate whether foreign aid affects the probability of incumbent's re-election and then the Schumpeterian quality of democracy in developing countries. We present a simple theoretical framework, which captures the competitiveness of elections through the Tullock's approach based on the Contest Success Function. We obtain an ambiguous theoretical effect of foreign aid on the incumbent probability to be reelected: Foreign aid increases the prize of the electoral contest stimulating the challenger to increase his campaign effort; But, the incumbent may divert part of the aid, improving his advantage and reducing political competition. We investigate empirically this effect using panel data from 60 aid-recipient countries between 1980 and 2005. Our analysis shows that foreign aid increases the incumbent's re-election probabilities. However, this effect depends on recipients' democratic level and on the nature of foreign aid, consistently with our theoretical framework. While financial aid increases the probability of incumbent's re-election, political aid, especially through assistances in developing competitive electoral systems, reduces this probability.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by HAL in its series Working Papers with number halshs-00722375.
Date of creation: 01 Aug 2012
Date of revision:
Note: View the original document on HAL open archive server: http://halshs.archives-ouvertes.fr/halshs-00722375
Contact details of provider:
Web page: http://hal.archives-ouvertes.fr/
Foreign aid; Elections; Incumbent's advantage;
Other versions of this item:
- Grégoire ROTA-GRAZIOSI & Clémence Vergne & Blanca MORENO DODSON, 2012. "Breaking the wave of democracy: The effect of foreign aid on the incumbent’s re-election probability," Working Papers 201231, CERDI.
- O11 - Economic Development, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
- F35 - International Economics - - International Finance - - - Foreign Aid
- D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
This paper has been announced in the following NEP Reports:
- NEP-ALL-2012-08-23 (All new papers)
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
- Antoine CAZALS & Alexandre Sauquet, 2013. "When does cooperation win and why? Political cycles and participation in international environmental agreements," Working Papers halshs-00903653, HAL.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (CCSD).
If references are entirely missing, you can add them using this form.