Does foreign aid harm political institutions?

TY - UNPB

T1 - Does foreign aid harm political institutions?

AU - Jones, Edward Samuel

AU - Tarp, Finn

N1 - JEL classification: F35, O17, O19

PY - 2015

Y1 - 2015

N2 - The notion that foreign aid harms the institutions of recipient governments remains prevalent. We combine new disaggregated aid data and various metrics of political institutions to re-examine this relationship. Long-run cross-section and alternative dynamic panel estimators show a small positive net effect of total aid on political institutions. Distinguishing between types of aid according to their frequency domain and stated objectives, we find this aggregate net effect is driven primarily by the positive contribution of more stable inflows of ‘governance aid’. We conclude the data do not support the view that aid has had a systematic negative effect on political institutions.

AB - The notion that foreign aid harms the institutions of recipient governments remains prevalent. We combine new disaggregated aid data and various metrics of political institutions to re-examine this relationship. Long-run cross-section and alternative dynamic panel estimators show a small positive net effect of total aid on political institutions. Distinguishing between types of aid according to their frequency domain and stated objectives, we find this aggregate net effect is driven primarily by the positive contribution of more stable inflows of ‘governance aid’. We conclude the data do not support the view that aid has had a systematic negative effect on political institutions.

M3 - Working paper

SN - 978-92-9230-942-8

T3 - UNU WIDER Working Paper Series

BT - Does foreign aid harm political institutions?

PB - UNU-WIDER

CY - Helsinki

ER -