Working Paper
68

Democracy and Aid Donorship

Date Published

Dec 12, 2018

Authors

Andreas Fuchs, Angelika Müller

Publisher

Citation

Fuchs, A. & Müller, A. (2018). Democracy and Aid Donorship. AidData Working paper #68. Williamsburg, VA: AidData at William & Mary

Announcement

Almost half of the world’s states provide bilateral development assistance. While previous research takes the set of donor countries as exogenous, this article is the first to explore the determinants of aid donorship. We hypothesize that democratic institutions reduce the likelihood that poor countries will become aid donors. By contrast, the leadership of poor authoritarian regimes face fewer constraints that would hinder these governments from reaping the benefits of a development aid program despite popular opposition. To test our expectations, we build a new global dataset on aid donorship since 1945 and apply an instrumental-variables strategy that exploits exogenous variation in regional waves of democratization. Our results confirm that the likelihood of a democratic country initiating a development aid program is more dependent upon per-capita income in democratic countries than in authoritarian countries. Overall, democracies are—if anything—less rather than more likely to engage in aid giving.

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Andreas Fuchs

Andreas Fuchs

Senior Researcher at the Alfred-Weber-Institute for Economics at Heidelberg University

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