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Democracy and Aid Donorship

Author

Listed:
  • Angelika J. Budjan
  • Andreas Fuchs

Abstract

Almost half of the world's states provide bilateral development assistance. While previous research takes the set of donor countries as exogenous, this article introduces a new dataset on aid giving that covers all countries in the world, both rich and poor, and explores the determinants of aid donorship. It argues and shows empirically that democratic institutions support the setup of an aid program in richer countries but undermine its establishment in poorer countries. The findings hold in instrumental-variable regressions and the pattern is similar for the amount of aid.

Suggested Citation

  • Angelika J. Budjan & Andreas Fuchs, 2021. "Democracy and Aid Donorship," American Economic Journal: Economic Policy, American Economic Association, vol. 13(4), pages 217-238, November.
    • Handle: RePEc:aea:aejpol:v:13:y:2021:i:4:p:217-38
    DOI: 10.1257/pol.20180582
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    Citations

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    Cited by:

    1. Sardoschau, Sulin & Jarotschkin, Alexandra, 2024. "Chinese aid in Africa: Attitudes and conflict," European Journal of Political Economy, Elsevier, vol. 81(C).
    2. Gerda Asmus-Bluhm & Vera Z. Eichenauer & Andreas Fuchs & Bradley Parks, 2025. "Does India Use Development Finance to Compete With China? A Subnational Analysis," Journal of Conflict Resolution, Peace Science Society (International), vol. 69(2-3), pages 406-433, March.
    3. Fuchs, Andreas & Kaplan, Lennart & Kis-Katos, Krisztina & Leue, Sebastian & Turbanisch, Felix & Wang, Feicheng, 2025. "Tracking Chinese aid through China Customs," World Development, Elsevier, vol. 195(C).
    4. Sulin Sardoschau & Alexandra Jarotschkin, 2023. "Chinese Aid in Africa: Attitudes and Conflict," Rationality and Competition Discussion Paper Series 451, CRC TRR 190 Rationality and Competition.
    5. Stephan Schneider & Sven Kunze, 2021. "Disastrous Discretion: Ambiguous Decision Situations Foster Political Favoritism," KOF Working papers 21-491, KOF Swiss Economic Institute, ETH Zurich.

    More about this item

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • F35 - International Economics - - International Finance - - - Foreign Aid
    • H87 - Public Economics - - Miscellaneous Issues - - - International Fiscal Issues; International Public Goods
    • O17 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements
    • O19 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - International Linkages to Development; Role of International Organizations

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