Democratization and Foreign Aid Effectiveness in Developing Countries from 1970-2008
Year: 2011
Type: preprint
Abstract: Despite the fact that foreign aid has flowed from the West to the developing world for several decades, debate on aid effectiveness persists. In terms of governance, the literature suggests aid can affect internal political dynamics of recipient countries, but there is little consensus on whether aid can bring wholesale democratization. In this paper, I test whether all types of foreign aid can lead to future democratization in recipient countries. I first use the definition of democracy from Cheibub et al. (2010) then replicate and extend the multinomial logit model of Kalyvitis and Vlachaki (2010) using observations from 107 countries. I follow the general pattern in the literature of averaging data over five-year time periods, also testing on annual data to see whether aid can have a more immediate effect on democratization. In both cases, aid can bring about future democratization, although the effect is small. Using data from Freedom House (2011) to test for robustness, there is almost no support for Cheibub et al. (2010). I argue that Freedom House data is not be the most applicable for this research question. Finally, there is strong additional evidence that policymakers with access to foreign aid as a policy instrument would be wise to consider country specific cultural conditions that significantly affect the process of democratization.
Source: SSRN Electronic Journal
Author: T. Boone
Institution: Western New England University
Language: English
Subfield: Development
Field: Social Sciences
Domain: Social Sciences
Open Access status: green
OpenAlex ID: W1589797605