The Dynamics of Aid and Political Rights

Fielding, David

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The Dynamics of Aid and Political Rights

Fielding, David

Cite this item: Fielding, D. (2011). The Dynamics of Aid and Political Rights (Economics Discussion Papers Series No. 1102). University of Otago. Retrieved from http://hdl.handle.net/10523/1665

Permanent link to OUR Archive version: http://hdl.handle.net/10523/1665

Date: 2011-04

Publisher: University of Otago

Series: Economics Discussion Papers Series

Series number: 1102

ISSN: 1178-2293

Keywords: Aid, political rights, dynamic panel model

Research Type: Discussion Paper

Languages: English

Abstract:

Several existing papers explore the extent to which the cross-country variation in measures of democracy and political rights can be explained by the cross-country variation in foreign aid inflows. Using panel data, we explore the extent to which the variation over time in such measures can be explained by changes in aid inflows, thus providing direct evidence on the impact of innovations in donor policy, and distinguishing between the short-run and long-run effects of changes in aid. Our results are very different from those based on cross-country variation in aid inflows. We find evidence of large differences between the effect of aggregate aid and the effect of aid for political reform, and between the effects in countries at different stages of political development. There is no evidence that aid intended for political reform has achieved its objective, and in some countries it may be counter-productive. However, aggregate aid can have a beneficial effect on political rights.

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