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When does more aid imply less democracy? An empirical examination

  • Irene Vlachaki

    ()

    (European Commission, Brussels, Belgium)

  • Sarantis Kalyvitis

    ()

    (DIEES, AUEB)

Foreign aid flows have increased considerably during the last decades, targeting, apart from development objectives, goals related to democracy. In this paper we investigate whether aid has affected the political regime of recipient countries. To this end, we use annual data on Net Official Development Assistance covering 64 aid-recipients. Because of data limitations, we cover the period 1967-2002. We find that aid flows decreased the likelihood of observing a democratic regime in a recipient country. This effect is sensitive to economic and social conditions. The negative relation between aid and democracy is moderated when aid flows are preceded by economic liberalization. Aid from the U.S. has a non-significant effect on the political regime of recipients.

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Paper provided by Athens University of Economics and Business in its series DEOS Working Papers with number 1125.

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Date of creation: 29 Jul 2011
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Publication status: Forthcoming in European Journal of Political Economy
Handle: RePEc:aue:wpaper:1125
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