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Are Democratizing Countries ‘Rewarded’ with Higher Levels of Foreign Aid?

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  • Szent-Iványi, Balázs

Abstract

The paper examines how flows of foreign aid have reacted to events of democratization in developing countries. Using a panel dataset of 136 aid receiving countries between 1980 and 2009, aid allocation regressions reveal that donors in general have tended to react to visible, major democratic transitions by increasing aid to the partner country, but no significant increases can be identified in case of countries introducing smaller democratic reforms. The increases in aid flows are not sustained over time, implying that donors do not provide long term support to nascent democracies. Also, democratizations in Sub-Saharan Africa do not seem to have been rewarded with higher levels of aid.

Suggested Citation

  • Szent-Iványi, Balázs, 2014. "Are Democratizing Countries ‘Rewarded’ with Higher Levels of Foreign Aid?," Corvinus Economics Working Papers (CEWP) 2014/04, Corvinus University of Budapest.
  • Handle: RePEc:cvh:coecwp:2014/04
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    More about this item

    Keywords

    foreign aid; aid allocation; democratization;
    All these keywords.

    JEL classification:

    • F35 - International Economics - - International Finance - - - Foreign Aid
    • F59 - International Economics - - International Relations, National Security, and International Political Economy - - - Other

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