The Dynamics of Aid and Political Rights
AbstractSeveral existing papers explore the extent to which the cross-country variation in measures of democracy and political rights can be explained by the cross-country variation in foreign aid inflows. Using panel data, we explore the extent to which the variation over time in such measures can be explained by changes in aid inflows, thus providing direct evidence on the impact of innovations in donor policy, and distinguishing between the short-run and long-run effects of changes in aid. Our results are very different from those based on cross-country variation in aid inflows. We find evidence of large differences between the effect of aggregate aid and the effect of aid for political reform, and between the effects in countries at different stages of political development. There is no evidence that aid intended for political reform has achieved its objective, and in some countries it may be counter-productive. However, aggregate aid can have a beneficial effect on political rights.
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Bibliographic InfoPaper provided by University of Otago, Department of Economics in its series Working Papers with number 1102.
Length: 30 pages
Date of creation: Apr 2011
Date of revision: Apr 2011
Aid; political rights; dynamic panel model;
Find related papers by JEL classification:
- O19 - Economic Development, Technological Change, and Growth - - Economic Development - - - International Linkages to Development; Role of International Organizations
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