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The Politics of Foreign Aid: A Median Voter Perspective

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  • Wolfgang Mayer
  • Pascalis Raimondos‐Møller

Abstract

The paper presents a model where the median voter in the donor country determines the support of foreign aid. It is first established that an individual in the donor country is affected by the direct benefits (due to altruism) and costs (due to taxes) of giving aid, and by the indirect benefits or costs of a change in the terms of trade. Then it is shown that the latter effect works through changing both the donor country's average income and its distribution of income. Given the stylized facts of a capital‐abundant donor country and relatively capital‐poor median voter, it is shown how redistribution‐of‐income effects soften the impact of terms‐of‐trade changes on the political support for foreign aid.

Suggested Citation

  • Wolfgang Mayer & Pascalis Raimondos‐Møller, 2003. "The Politics of Foreign Aid: A Median Voter Perspective," Review of Development Economics, Wiley Blackwell, vol. 7(2), pages 165-178, May.
    • Handle: RePEc:bla:rdevec:v:7:y:2003:i:2:p:165-178
    DOI: 10.1111/1467-9361.00183
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    Citations

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    Cited by:

    1. Ben Leo, 2013. "Is Anyone Listening? Does US Foreign Assistance Target People's Top Priorities?-Working Paper 348," Working Papers 348, Center for Global Development.
    2. Helen V. Milner & Dustin H. Tingley, 2010. "The Political Economy Of U.S. Foreign Aid: American Legislators And The Domestic Politics Of Aid," Economics and Politics, Wiley Blackwell, vol. 22(2), pages 200-232, July.
    3. Börner, Kira, 2004. "Political Economy Reasons for Government Inertia: The Role of Interest Groups in the Case of Access to Medicines," Discussion Papers in Economics 313, University of Munich, Department of Economics.
    4. Czaika, Mathias & Mayer, Amy, 2007. "Burden-sharing or migration management?," Proceedings of the German Development Economics Conference, Göttingen 2007 3, Verein für Socialpolitik, Research Committee Development Economics.
    5. Simon Feeny & Paul Hansen & Stephen Knowles & Mark McGillivray & Franz Ombler, 2019. "Donor motives, public preferences and the allocation of UK foreign aid: a discrete choice experiment approach," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 155(3), pages 511-537, August.
    6. Sajal Lahiri & Pascalis Raimondos‐Møller, 2004. "Donor Strategy under the Fungibility of Foreign Aid," Economics and Politics, Wiley Blackwell, vol. 16(2), pages 213-231, July.
    7. Paulo Reis Mourao & Alina Irina Popescu, 2021. "Discussing the political survival of Romanian ministers since 1989—Do economic conditions matter?," Economics of Transition and Institutional Change, John Wiley & Sons, vol. 29(1), pages 63-93, January.

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