Why foreign aid does (not) improve democracy?
Foreign aid has become closely connected to the development of democracy since the nineties. This paper analyses the democracy effects of aid accounting for this change in donors’ criteria. This approach contributes to the literature by analysing how the kind of donor allocating aid flows influences the effect of aid on democ- racy. I estimate a dynamic panel data model using data from 52 African countries between 1997 and 2008. I find that aid favours democracy. However when consider- ing the kind of donor, I observe that while bilateral aid does not foster democracy, multilateral aid favours democracy. Robustness tests confirm these findings.
|Date of creation:||2012|
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- Richard Blundell & Stephen Bond, 1995. "Initial conditions and moment restrictions in dynamic panel data models," IFS Working Papers W95/17, Institute for Fiscal Studies.
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- Bhattacharyya, Sambit, 2012. "Trade liberalization and institutional development," Journal of Policy Modeling, Elsevier, vol. 34(2), pages 253-269.
- Sambit Bhattacharyya, 2008. "Trade Liberalization And Institutional Development," Departmental Working Papers 2008-13, The Australian National University, Arndt-Corden Department of Economics.
- Dollar, David & Levin, Victoria, 2004. "Increasing selectivity of foreign aid, 1984-2002," Policy Research Working Paper Series 3299, The World Bank.
- Jac C. Heckelman, 2010. "Aid and Democratization in the Transition Economies," Kyklos, Wiley Blackwell, vol. 63(4), pages 558-579, November.
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- repec:hrv:faseco:30747160 is not listed on IDEAS Full references (including those not matched with items on IDEAS)
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