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US Aid, US educated Leaders and Economic Ideology

Author

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  • Anna Minasyan

    (Georg-August University Göttingen)

Abstract

The Unites States (US) openly promotes its economic ideology on free-markets through foreign aid. It also regards foreign education in the US as way of spreading own ideas and values among the powerful elite in developing countries. US educated aid recipient country leaders may thus receive more US aid, if they share both the cultural values and the economic ideology of the US. I test this hypothesis using a panel fixed-effects regression model for 896 leaders and 143 countries over the period from 1981 to 2010. I address self- and donor-selection biases by including leader fixed effects in the regression analysis, in addition to the country and year fixed effects. In result, I find that on average the US allocates 30 percent more bilateral aid to US educated right leaders compared to US educated left leaders. Heterogeneity analysis reveals that the findings are driven by right-wing US leadership.

Suggested Citation

  • Anna Minasyan, 2016. "US Aid, US educated Leaders and Economic Ideology," Courant Research Centre: Poverty, Equity and Growth - Discussion Papers 215, Courant Research Centre PEG.
    • Handle: RePEc:got:gotcrc:215
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    2. Dzhumashev, Ratbek & Hailemariam, Abebe, 2021. "Foreign aid and the quality of economic institutions," European Journal of Political Economy, Elsevier, vol. 68(C).
    3. Li, Jingheng & Xi, Tianyang & Yao, Yang, 2020. "Empowering knowledge: Political leaders, education, and economic liberalization," European Journal of Political Economy, Elsevier, vol. 61(C).
    4. Dreher, Axel & Lang, Valentin & Reinsberg, Bernhard, 2024. "Aid effectiveness and donor motives," World Development, Elsevier, vol. 176(C).
    5. Adam, Antonis & Tsarsitalidou, Sofia, 2022. "The effect of international development association's (IDA) aid on conflict. A fuzzy regression discontinuity approach," European Journal of Political Economy, Elsevier, vol. 74(C).

    More about this item

    Keywords

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    JEL classification:

    • F35 - International Economics - - International Finance - - - Foreign Aid
    • F54 - International Economics - - International Relations, National Security, and International Political Economy - - - Colonialism; Imperialism; Postcolonialism
    • P16 - Political Economy and Comparative Economic Systems - - Capitalist Economies - - - Capitalist Institutions; Welfare State
    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior

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