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Foreign Aid and Policy Concessions

Author

Listed:
  • Bruce Bueno de Mesquita

    (Wilf Family Department of Politics, New York University, New York City)

  • Alastair Smith

    (Wilf Family Department of Politics, New York University, New York City)

Abstract

We model foreign-aid-for-policy deals, assuming that leaders want to maximize their time in office. Their actions are shaped by two political institutions, their selectorate and winning coalition. Leaders who depend on a large coalition, a relatively small selectorate, and who extract valuable policy concessions from prospective recipients are likely to give aid. Prospective recipients are likely to get aid if they have few resources, depend on a small coalition and a large selectorate, and the policy concession sought by the donor is not too politically costly. The amount of aid received, if any, increases as the recipient leader's coalition increases, the selectorate decreases, the issue's salience increases, and the domestic resources increase. The theory explains why many Third World people hate the United States and want to live there. Empirical tests using the U.S. Agency for International Development data for the post—World War II years support the model's predictions.

Suggested Citation

  • Bruce Bueno de Mesquita & Alastair Smith, 2007. "Foreign Aid and Policy Concessions," Journal of Conflict Resolution, Peace Science Society (International), vol. 51(2), pages 251-284, April.
  • Handle: RePEc:sae:jocore:v:51:y:2007:i:2:p:251-284
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    Citations

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    Cited by:

    1. Dreher, Axel & Fuchs, Andreas & Hodler, Roland & Parks, Bradley C. & Raschky, Paul A. & Tierney, Michael J., 2015. "Aid on Demand: African Leaders and the Geography of China's Foreign Assistance," CEPR Discussion Papers 10704, C.E.P.R. Discussion Papers.
    2. Ehizuelen Michael Mitchell Omoruyi, 2016. "The Dragon's Goodwill: Examining China's External Finance and African Leaders' Preferentialism," Journal of International Commerce, Economics and Policy (JICEP), World Scientific Publishing Co. Pte. Ltd., vol. 7(03), pages 1-30, October.
    3. repec:eee:chieco:v:46:y:2017:i:c:p:180-207 is not listed on IDEAS
    4. Dreher, Axel & Fuchs, Andreas & Parks, Bradley & Strange, Austin M. & Tierney, Michael J., 2016. "Apples and Dragon Fruits: The Determinants of Aid and Other Forms of State Financing from China to Africa," Working Papers 0620, University of Heidelberg, Department of Economics.
    5. 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.
    6. Daoud, Adel & Halleröd, Björn & Guha Sapir, Debarati, 2015. "Quality of government and the relationship between natural disasters and child poverty: A comparative analysis," MPIfG Discussion Paper 15/5, Max Planck Institute for the Study of Societies.
    7. repec:spr:revint:v:12:y:2017:i:2:d:10.1007_s11558-017-9275-2 is not listed on IDEAS
    8. Hartmann, Simon, 2012. "The conceptual flaws of the new EU development agenda from a political economy perspective, or why change is problematic for a donor-driven development policy," Working Papers 35, Österreichische Forschungsstiftung für Internationale Entwicklung (ÖFSE) / Austrian Foundation for Development Research.
    9. Hartmann, Simon, 2011. "Political constraints on division of labor in development policy across countries: A proposal for a more viable coordination procedure at the EU level," Working Papers 28, Österreichische Forschungsstiftung für Internationale Entwicklung (ÖFSE) / Austrian Foundation for Development Research.
    10. Kersting, Erasmus K. & Kilby, Christopher, 2016. "With a little help from my friends: Global electioneering and World Bank lending," Journal of Development Economics, Elsevier, vol. 121(C), pages 153-165.
    11. Antràs, Pol & Padró i Miquel, Gerard, 2011. "Foreign influence and welfare," Journal of International Economics, Elsevier, vol. 84(2), pages 135-148, July.
    12. Helen V. Milner & Daniel L. Nielson & Michael G. Findley, 2016. "Citizen preferences and public goods: comparing preferences for foreign aid and government programs in Uganda," The Review of International Organizations, Springer, vol. 11(2), pages 219-245, June.
    13. Lis Piotr, 2014. "Terrorism, Armed Conflict and Foreign Aid," Peace Economics, Peace Science, and Public Policy, De Gruyter, vol. 20(4), pages 1-13, December.
    14. Georg Strüver, 2012. "What Friends Are Made Of: Bilateral Linkages and Domestic Drivers of Foreign Policy Alignment with China," GIGA Working Paper Series 209, GIGA German Institute of Global and Area Studies.
    15. Hartmann, Simon, 2011. "Geberverhalten in der internationalen Entwicklungspolitik: Schwierigkeiten beim Umgang mit dem Spannungsfeld Rechenschaftspflichten," Working Papers 26, Österreichische Forschungsstiftung für Internationale Entwicklung (ÖFSE) / Austrian Foundation for Development Research.
    16. Broich, Tobias, 2017. "Do authoritarian regimes receive more Chinese development finance than democratic ones? Empirical evidence for Africa," MERIT Working Papers 011, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).

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