Aid and Democracy Redux
AbstractThis paper uses Freedom House ratings to assess the impact of foreign aid on democracy. We employ an interval regression to account for Freedom House's method of rating countries. A cross-sectional analysis examining the long run effect of aid on democracy in 122 countries between 1972 and 2011 finds a significant positive relationship that survives various tests for endogeneity. A short run annual panel analysis of 156 countries between 1985 and 2011 explores whether aid operates through leverage and conditionality. We present evidence that i) donors allocate aid in response to democratization and ii) recipient countries respond to this incentive for democratic reform. Our identification strategy relies on the reduced importance of democratization in the allocation of aid to geopolitically important countries.
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 Villanova School of Business Department of Economics and Statistics in its series Villanova School of Business Department of Economics and Statistics Working Paper Series with number 23.
Date of creation: Jun 2013
Date of revision:
Contact details of provider:
Web page: http://www.villanova.edu/business/facultyareas/economics/
More information through EDIRC
Democracy; Freedom House; Foreign Aid; Political Reform;
Find related papers by JEL classification:
- F35 - International Economics - - International Finance - - - Foreign Aid
This paper has been announced in the following NEP Reports:
- NEP-ALL-2013-06-16 (All new papers)
- NEP-DEV-2013-06-16 (Development)
- NEP-POL-2013-06-16 (Positive Political Economics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Michael A. Clemens & Steven Radelet & Rikhil R. Bhavnani & Samuel Bazzi, 2012. "Counting Chickens when they Hatch: Timing and the Effects of Aid on Growth," Economic Journal, Royal Economic Society, vol. 122(561), pages 590-617, 06.
- Fielding, A., 1998.
"Why Use Arbitrary Points Scores: Ordered Categories in Models of Educational Progress,"
98-23, Department of Economics, University of Birmingham.
- A. Fielding, 1999. "Why use arbitrary points scores?: ordered categories in models of educational progress," Journal of the Royal Statistical Society Series A, Royal Statistical Society, vol. 162(3), pages 303-328.
- Simeon Djankov & Jose Montalvo & Marta Reynal-Querol, 2008.
"The curse of aid,"
Journal of Economic Growth,
Springer, vol. 13(3), pages 169-194, September.
- Simeon Djankov & José Garcia Montalvo & Marta Reynal-Querol, 2005. "The curse of aid," Working Papers 257, Barcelona Graduate School of Economics.
- Simeon Djankov & José Garcia Montalvo & Marta Reynal-Querol, 2005. "The curse of aid," Economics Working Papers 870, Department of Economics and Business, Universitat Pompeu Fabra.
- Stewart, Mark B, 1982.
"On Least Squares Estimation when the Dependent Variable is Grouped,"
The Warwick Economics Research Paper Series (TWERPS)
207, University of Warwick, Department of Economics.
- Stewart, Mark B, 1983. "On Least Squares Estimation When the Dependent Variable Is Grouped," Review of Economic Studies, Wiley Blackwell, vol. 50(4), pages 737-53, October.
- David A Armstrong II, 2011. "Stability and change in the Freedom House political rights and civil liberties measures," Journal of Peace Research, Peace Research Institute Oslo, vol. 48(5), pages 653-662, September.
- Axel Dreher & Andreas Fuchs, 2011.
"Rogue Aid? The Determinants of China’s Aid Allocation,"
Courant Research Centre: Poverty, Equity and Growth - Discussion Papers
93, Courant Research Centre PEG, revised 29 Feb 2012.
- Axel Dreher & Andreas Fuchs, 2011. "Rogue Aid? The Determinants of China’s Aid Allocation," Working Papers CEB 11-035, ULB -- Universite Libre de Bruxelles.
- Axel Dreher & Andreas Fuchs, 2011. "Rogue Aid? The Determinants of China's Aid Allocation," CESifo Working Paper Series 3581, CESifo Group Munich.
- Nabamita Dutta & Peter T. Leeson & Claudia R. Williamson, 2013. "The Amplification Effect: Foreign Aid's Impact on Political Institutions," Kyklos, Wiley Blackwell, vol. 66(2), pages 208-228, 05.
- Morrison, Kevin M., 2009. "Oil, Nontax Revenue, and the Redistributional Foundations of Regime Stability," International Organization, Cambridge University Press, vol. 63(01), pages 107-138, January.
- Dietrich, Simone & Wright, Joseph, 2012. "Foreign Aid and Democratic Development in Africa," Working Paper Series UNU-WIDER Research Paper , World Institute for Development Economic Research (UNU-WIDER).
- Sarantis Kalyvitis & Irene Vlachaki, 2010. "Democratic Aid And The Democratization Of Recipients," Contemporary Economic Policy, Western Economic Association International, vol. 28(2), pages 188-218, 04.
- Jac C. Heckelman, 2010. "Aid and Democratization in the Transition Economies," Kyklos, Wiley Blackwell, vol. 63(4), pages 558-579, November.
- Goldsmith, Arthur A., 2001. "Foreign Aid and Statehood in Africa," International Organization, Cambridge University Press, vol. 55(01), pages 123-148, December.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Christopher Kilby).
If references are entirely missing, you can add them using this form.