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More than Words and Good Intentions: The Political Agenda-Setting Power Behind Foreign Aid Mechanisms

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  • Riaño Rodríguez, Juan Felipe

Abstract

In this paper, international aid is examined as a tool for political agenda-setting. A theoretical model is constructed for the analysis, incorporating the incentives created by foreign aid, on the political benefits of recipient governments. The model also incorporates the compensating benefits provided by these governments through the legitimization of the donor country's political agenda. The main results of this model indicate that governments which offer international assistance can influence the political agenda of recipient countries through two channels: 1) By reducing the political costs of official intervention in issues that receive aid, and 2) By generating incentives for additional political rent-seeking. The results are studied in the case of aid provided by the USA to Colombia during the period 1998-2012, which shows the power of US presidents to establish part of the Colombian political agenda related to drugs and terrorism. The results are obtained through a novel content analysis of presidential speeches in both countries and from a set of estimates corrected by possible problems of endogeneity in foreign aid allocation.

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  • Riaño Rodríguez, Juan Felipe, 2014. "More than Words and Good Intentions: The Political Agenda-Setting Power Behind Foreign Aid Mechanisms," MPRA Paper 54826, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:54826
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    1. William Easterly, 2002. "The cartel of good intentions: The problem of bureaucracy in foreign aid," Journal of Economic Policy Reform, Taylor & Francis Journals, vol. 5(4), pages 223-250.
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    More about this item

    Keywords

    Agenda-Setting; Foreign Aid; Content Analysis; International-Politics;
    All these keywords.

    JEL classification:

    • F02 - International Economics - - General - - - International Economic Order and Integration
    • F35 - International Economics - - International Finance - - - Foreign Aid
    • F54 - International Economics - - International Relations, National Security, and International Political Economy - - - Colonialism; Imperialism; Postcolonialism
    • F59 - International Economics - - International Relations, National Security, and International Political Economy - - - Other

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