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Aid Is Not Oil: Donor Utility, Heterogeneous Aid, and the Aid-Democratization Relationship

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  • Bermeo, Sarah Blodgett

Abstract

Recent articles conclude that foreign aid, like other nontax resources, inhibits political change in authoritarian regimes. This article challenges both the negative political effects of aid and the similarity of aid to other resources. It develops a model incorporating changing donor preferences and the heterogeneity of foreign aid. Consistent with the model's predictions, an empirical test for the period 1973–2010 shows that, on average, the negative relationship between aid and the likelihood of democratic change is confined to the Cold War period. However, in the post–Cold War period, nondemocratic recipients of particular strategic importance can still use aid to thwart change. The relationship between oil revenue and democratic change does not follow the same pattern over time or across recipients. This supports the conclusion that aid has different properties than other, fungible, resources.

Suggested Citation

  • Bermeo, Sarah Blodgett, 2016. "Aid Is Not Oil: Donor Utility, Heterogeneous Aid, and the Aid-Democratization Relationship," International Organization, Cambridge University Press, vol. 70(1), pages 1-32, January.
    • Handle: RePEc:cup:intorg:v:70:y:2016:i:01:p:1-32_00
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    Cited by:

    1. Dreher, Axel & Lang, Valentin & Reinsberg, Bernhard, 2024. "Aid effectiveness and donor motives," World Development, Elsevier, vol. 176(C).
    2. Isaksson, Ann-Sofie, 2020. "Chinese Aid and Local Ethnic Identification," International Organization, Cambridge University Press, vol. 74(4), pages 833-852, October.
    3. Brandon Cuesta & Lucy Martin & Helen V. Milner & Daniel L. Nielson, 2021. "Foreign aid, oil revenues, and political accountability: Evidence from six experiments in Ghana and Uganda," The Review of International Organizations, Springer, vol. 16(3), pages 521-548, July.
    4. Toke S. Aidt & Facundo Albornoz & Esther Hauk, 2019. "Foreign in influence and domestic policy: A survey," Cambridge Working Papers in Economics 1928, Faculty of Economics, University of Cambridge.
    5. Francois Cornelius Wehncke & Patricia Lindelwa Makoni & Godfrey Marozva, 2022. "Nexus Between FDI, ODA and Economic Growth in Developing African Countries: A Systems Approach," Economic Research Guardian, Weissberg Publishing, vol. 12(2), pages 97-114, December.
    6. Murat Bayar & Mustafa M. Aral, 2019. "An Analysis of Large-Scale Forced Migration in Africa," IJERPH, MDPI, vol. 16(21), pages 1-16, October.
    7. Sargis Karavardanyan, 2022. "Short-Term Harm, Long-Term Prosperity? Democracy, Corruption and Foreign Direct Investments in Sino-African Economic Relations," Comparative Economic Studies, Palgrave Macmillan;Association for Comparative Economic Studies, vol. 64(3), pages 417-486, September.
    8. Dijkstra, Geske, 2018. "Aid and good governance: Examining aggregate unintended effects of aid," Evaluation and Program Planning, Elsevier, vol. 68(C), pages 225-232.
    9. Daina Chiba & Tobias Heinrich, 2019. "Colonial Legacy and Foreign Aid: Decomposing the Colonial Bias," International Interactions, Taylor & Francis Journals, vol. 45(3), pages 474-499, May.
    10. Ahsan Kibria & Reza Oladi & Ryan Bosworth, 2021. "Political economy of aid allocation: The case of Arab donors," The World Economy, Wiley Blackwell, vol. 44(8), pages 2460-2495, August.
    11. Portela, Clara & Mora-Sanguinetti, Juan S., 2023. "Sanctions effectiveness, development and regime type. Are aid suspensions and economic sanctions alike?," World Development, Elsevier, vol. 172(C).
    12. Minasyan, Anna & Nunnenkamp, Peter & Richert, Katharina, 2017. "Does Aid Effectiveness Depend on the Quality of Donors?," World Development, Elsevier, vol. 100(C), pages 16-30.
    13. Jablonski, Ryan S. & Oliver, Steven & Hastings, Justin V., 2017. "The Tortuga disease: the perverse effects of illicit foreign capital," LSE Research Online Documents on Economics 67105, London School of Economics and Political Science, LSE Library.
    14. Toke S. Aidt & Facundo Albornoz & Esther Hauk, 2021. "Foreign Influence and Domestic Policy," Journal of Economic Literature, American Economic Association, vol. 59(2), pages 426-487, June.
    15. Corwin, Hillary, 2023. "Coercive and catalytic strategies for human rights promotion: State violence and foreign assistance," World Development, Elsevier, vol. 167(C).
    16. Michael G. Findley & Helen V. Milner & Daniel L. Nielson, 2017. "The choice among aid donors: The effects of multilateral vs. bilateral aid on recipient behavioral support," The Review of International Organizations, Springer, vol. 12(2), pages 307-334, June.
    17. Andreas Kern & Bernhard Reinsberg & Patrick E. Shea, 2024. "Why cronies don’t cry? IMF programs, Chinese lending, and leader survival," Public Choice, Springer, vol. 198(3), pages 269-295, March.
    18. Cheeseman, Nic & Swedlund, Haley J. & O'Brien-Udry, Cleo, 2024. "Foreign aid withdrawals and suspensions: Why, when and are they effective?," World Development, Elsevier, vol. 178(C).
    19. Tobias Heinrich & Matt W. Loftis, 2019. "Democracy Aid and Electoral Accountability," Journal of Conflict Resolution, Peace Science Society (International), vol. 63(1), pages 139-166, January.
    20. Mitchell Watkins, 2022. "Undermining conditionality? The effect of Chinese development assistance on compliance with World Bank project agreements," The Review of International Organizations, Springer, vol. 17(4), pages 667-690, October.
    21. Kim, Nam Kyu & Kroeger, Alex, 2017. "Rewarding the introduction of multiparty elections," European Journal of Political Economy, Elsevier, vol. 49(C), pages 164-181.
    22. Allison Carnegie & Lindsay R. Dolan, 2021. "The effects of rejecting aid on recipients’ reputations: Evidence from natural disaster responses," The Review of International Organizations, Springer, vol. 16(3), pages 495-519, July.

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