Foreign Aided: Why Democratization Brings Growth When Democracy Does Not

TY - JOUR

T1 - Foreign Aided: Why Democratization Brings Growth When Democracy Does Not

AU - Hariri, Jacob Gerner

PY - 2013/6/12

Y1 - 2013/6/12

N2 - There is an unresolved puzzle in research on the economics of democracy. While there is consensus that democracy is not generally associated with higher rates of economic growth, recent studies have found that democratization is followed by growth. But why should becoming a democracy bring growth if being one does not? This article shows that a substantial and immediate influx of foreign aid into new democracies accounts for the positive growth effect of democratization. The domestic regime characteristics of neither democracy nor democratization therefore seems to bring growth. The importance of aid in explaining the democratization-growth nexus underscores that democratizations do not occur in vacuum and cannot be fully understood from internal factors alone.

AB - There is an unresolved puzzle in research on the economics of democracy. While there is consensus that democracy is not generally associated with higher rates of economic growth, recent studies have found that democratization is followed by growth. But why should becoming a democracy bring growth if being one does not? This article shows that a substantial and immediate influx of foreign aid into new democracies accounts for the positive growth effect of democratization. The domestic regime characteristics of neither democracy nor democratization therefore seems to bring growth. The importance of aid in explaining the democratization-growth nexus underscores that democratizations do not occur in vacuum and cannot be fully understood from internal factors alone.

U2 - 10.1017/S0007123413000276

DO - 10.1017/S0007123413000276

M3 - Journal article

SN - 0007-1234

VL - 45

SP - 53

EP - 71

JO - British Journal of Political Science

JF - British Journal of Political Science

IS - 1

ER -