IDEAS home Printed from https://ideas.repec.org/a/sae/jocore/v54y2010i1p58-87.html
   My bibliography  Save this article

Coming into Money: The Impact of Foreign Aid on Leader Survival

Author

Listed:
  • Amanda A. Licht

    (University of Iowa, Iowa City, USA, amanda-licht@uiowa.edu)

Abstract

Donors are more likely to send aid to leaders facing elevated risks of losing power, but targets’ ability to benefit from this assistance is conditioned by regime type and political processes. The institutionalization of winning coalitions’ loyalty across regime type follows opposite patterns, supporting opposite temporal dynamics across regime types. Democratic leaders’ coalitions are firmest immediately after taking office, and aid is of most assistance to them at that time. As competition and dissatisfaction grow, aid becomes a political liability. In small winning coalition systems, however, coalitions become more solid over time, facilitating increasing benefits from aid. Without a firm coalition, however, external resources are destabilizing to autocratic leaders. Analysis of 4,692 leader years from 1960 to 2001 using a censored probit model supports these expectations.

Suggested Citation

  • Amanda A. Licht, 2010. "Coming into Money: The Impact of Foreign Aid on Leader Survival," Journal of Conflict Resolution, Peace Science Society (International), vol. 54(1), pages 58-87, February.
    • Handle: RePEc:sae:jocore:v:54:y:2010:i:1:p:58-87
    DOI: 10.1177/0022002709351104
    as

    Download full text from publisher

    File URL: https://journals.sagepub.com/doi/10.1177/0022002709351104
    Download Restriction: no
    File URL: https://libkey.io/10.1177/0022002709351104?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Jakob Svensson, 2000. "Foreign aid and rent-seeking," Springer Books, in: Roger D. Congleton & Kai A. Konrad & Arye L. Hillman (ed.), 40 Years of Research on Rent Seeking 2, pages 165-189, Springer.
    2. Dudley, Leonard & Montmarquette, Claude, 1976. "A Model of the Supply of Bilateral Foreign Aid," American Economic Review, American Economic Association, vol. 66(1), pages 132-142, March.
    3. Bruce Bueno de Mesquita & Alastair Smith & Randolph M. Siverson & James D. Morrow, 2005. "The Logic of Political Survival," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262524406, December.
    4. Peter Boone, 1995. "Politics and the Effectiveness of Foreign Aid," CEP Discussion Papers dp0272, Centre for Economic Performance, LSE.
    5. Pack, Howard & Pack, Janet Rothenberg, 1993. "Foreign Aid and the Question of Fungibility," The Review of Economics and Statistics, MIT Press, vol. 75(2), pages 258-265, May.
    6. Peter Boone, 1995. "Politics and the Effectiveness of Foreign Aid," NBER Working Papers 5308, National Bureau of Economic Research, Inc.
    7. Scott Wolford, 2007. "The Turnover Trap: New Leaders, Reputation, and International Conflict," American Journal of Political Science, John Wiley & Sons, vol. 51(4), pages 772-788, October.
    8. David Dollar & Craig Burnside, 2000. "Aid, Policies, and Growth," American Economic Review, American Economic Association, vol. 90(4), pages 847-868, September.
    9. Carl-Johan Dalgaard & Henrik Hansen & Finn Tarp, 2004. "On The Empirics of Foreign Aid and Growth," Economic Journal, Royal Economic Society, vol. 114(496), pages 191-216, June.
    10. Brautigam, Deborah A & Knack, Stephen, 2004. "Foreign Aid, Institutions, and Governance in Sub-Saharan Africa," Economic Development and Cultural Change, University of Chicago Press, vol. 52(2), pages 255-285, January.
    11. Nikolay Marinov, 2005. "Do Economic Sanctions Destabilize Country Leaders?," American Journal of Political Science, John Wiley & Sons, vol. 49(3), pages 564-576, July.
    12. Timpone, Richard J., 2002. "Estimating Aggregate Policy Reform Effects: New Baselines for Registration, Participation, and Representation," Political Analysis, Cambridge University Press, vol. 10(2), pages 154-177, April.
    13. Berthelemy, Jean-Claude & Tichit, Ariane, 2004. "Bilateral donors' aid allocation decisions--a three-dimensional panel analysis," International Review of Economics & Finance, Elsevier, vol. 13(3), pages 253-274.
    14. Heckman, James, 2013. "Sample selection bias as a specification error," Applied Econometrics, Russian Presidential Academy of National Economy and Public Administration (RANEPA), vol. 31(3), pages 129-137.
    15. Collier, Paul & Dollar, David, 2002. "Aid allocation and poverty reduction," European Economic Review, Elsevier, vol. 46(8), pages 1475-1500, September.
    16. Giacomo Chiozza & H. E. Goemans, 2004. "International Conflict and the Tenure of Leaders: Is War Still Ex Post Inefficient?," American Journal of Political Science, John Wiley & Sons, vol. 48(3), pages 604-619, July.
    17. Kosack, Stephen & Tobin, Jennifer, 2006. "Funding Self-Sustaining Development: The Role of Aid, FDI and Government in Economic Success," International Organization, Cambridge University Press, vol. 60(1), pages 205-243, January.
    18. Feyzioglu, Tarhan & Swaroop, Vinaya & Zhu, Min, 1998. "A Panel Data Analysis of the Fungibility of Foreign Aid," The World Bank Economic Review, World Bank, vol. 12(1), pages 29-58, January.
    19. Burnside, Craig & Dollar, David, 2004. "Aid, policies, and growth : revisiting the evidence," Policy Research Working Paper Series 3251, The World Bank.
    20. de Mesquita, Bruce Bueno & Siverson, Randolph M., 1995. "War and the Survival of Political Leaders: A Comparative Study of Regime Types and Political Accountability," American Political Science Review, Cambridge University Press, vol. 89(4), pages 841-855, December.
    21. de Mesquita, Bruce Bueno & Smith, Alastair, 2009. "A Political Economy of Aid," International Organization, Cambridge University Press, vol. 63(2), pages 309-340, April.
    22. Mueller, John E., 1971. "Trends in Popular Support for the Wars in Korea and Vietnam 1," American Political Science Review, Cambridge University Press, vol. 65(2), pages 358-375, June.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Mare Sarr & Chiara Ravetti & Tim Swanson, 2015. "Why Give Aid to Resource-Rich Autocrats?," CIES Research Paper series 39-2015, Centre for International Environmental Studies, The Graduate Institute.
    2. repec:zbw:bofrdp:2019_013 is not listed on IDEAS
    3. Thilo Bodenstein & Achim Kemmerling, 2017. "The European Union as a Collective Actor: Aid and Trade in African Public Opinion," Development Policy Review, Overseas Development Institute, vol. 35(4), pages 567-586, July.
    4. 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.
    5. Ambrocio, Gene & Hasan, Iftekhar, 2019. "Friends for the benefits: The effects of political ties on sovereign borrowing conditions," Research Discussion Papers 13/2019, Bank of Finland.
    6. Ravetti, Chiara & Sarr, Mare & Swanson, Tim, 2018. "Foreign aid and political instability in resource-rich countries," Resources Policy, Elsevier, vol. 58(C), pages 277-294.
    7. Simone Dietrich & Amanda Murdie, 2017. "Human rights shaming through INGOs and foreign aid delivery," The Review of International Organizations, Springer, vol. 12(1), pages 95-120, March.
    8. Jones, Sam & Tarp, Finn, 2016. "Does foreign aid harm political institutions?," Journal of Development Economics, Elsevier, vol. 118(C), pages 266-281.
    9. Jones, Sam & Tarp, Finn, 2016. "Does foreign aid harm political institutions?," Journal of Development Economics, Elsevier, vol. 118(C), pages 266-281.
    10. Oleg Smirnov & Martin C. Steinwand & Tingyin Xiao & Minghua Zhang, 2018. "Climate Impacts, Political Institutions, and Leader Survival: Effects of Droughts and Flooding Precipitation," Economics of Disasters and Climate Change, Springer, vol. 2(2), pages 181-201, July.
    11. Reinsberg, Bernhard, 2015. "Foreign Aid Responses to Political Liberalization," World Development, Elsevier, vol. 75(C), pages 46-61.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Temple, Jonathan R.W., 2010. "Aid and Conditionality," Handbook of Development Economics, in: Dani Rodrik & Mark Rosenzweig (ed.), Handbook of Development Economics, edition 1, volume 5, chapter 0, pages 4415-4523, Elsevier.
    2. Philipp Harms & Matthias Lutz, 2004. "The Macroeconomic Effects of Foreign Aid: A Survey," University of St. Gallen Department of Economics working paper series 2004 2004-11, Department of Economics, University of St. Gallen.
    3. Keith Blackburn & Gonzalo F. Forgues-Puccio, 2011. "Foreign aid - a fillip for development or a fuel for corruption?," Centre for Growth and Business Cycle Research Discussion Paper Series 158, Economics, The University of Manchester.
    4. Tony Addison & George Mavrotas & Mark McGillivray, 2005. "Development assistance and development finance: evidence and global policy agendas," Journal of International Development, John Wiley & Sons, Ltd., vol. 17(6), pages 819-836.
    5. Reinsberg, Bernhard, 2015. "Foreign Aid Responses to Political Liberalization," World Development, Elsevier, vol. 75(C), pages 46-61.
    6. Sharri Byron, 2012. "Examining Foreign Aid Fungibility in Small Open Economies," Open Economies Review, Springer, vol. 23(4), pages 675-712, September.
    7. repec:bla:rdevec:v:13:y:2009:i:s1:p:403-415 is not listed on IDEAS
    8. Balázs Szent-Iványi, 2015. "Are Democratising Countries Rewarded with Higher Levels of Foreign Aid?," Acta Oeconomica, Akadémiai Kiadó, Hungary, vol. 65(4), pages 593-615, December.
    9. Feeny, Simon, 2007. "Foreign Aid and Fiscal Governance in Melanesia," World Development, Elsevier, vol. 35(3), pages 439-453, March.
    10. Juergen Bitzer & Erkan Goeren, 2018. "Foreign Aid and Subnational Development: A Grid Cell Analysis," Working Papers V-407-18, University of Oldenburg, Department of Economics, revised Mar 2018.
    11. Innocent .U. Duru & Bartholomew .O.N. Okafor & Millicent Adanne Eze & Gabriel .O. Ebenyi, 2020. "Foreign Aid and Economic Growth: Empirical Evidence from Nigeria," Growth, Asian Online Journal Publishing Group, vol. 7(1), pages 35-50.
    12. Feeny, Simon & de Silva, Ashton, 2012. "Measuring absorptive capacity constraints to foreign aid," Economic Modelling, Elsevier, vol. 29(3), pages 725-733.
    13. Almuth Scholl, 2018. "Debt Relief for Poor Countries: Conditionality and Effectiveness," Economica, London School of Economics and Political Science, vol. 85(339), pages 626-648, July.
    14. Patrick GUILLAUMONT, 2009. "Aid effectiveness for poverty reduction: macroeconomic overview and emerging issues," Working Papers P05, FERDI.
    15. Roland Hodler, 2007. "Rent seeking and aid effectiveness," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 14(5), pages 525-541, October.
    16. Carl-Johan Dalgaard & Henrik Hansen & Finn Tarp, 2004. "On The Empirics of Foreign Aid and Growth," Economic Journal, Royal Economic Society, vol. 114(496), pages 191-216, June.
    17. Mina Baliamoune-Lutz, 2012. "Do Institutions And Social Cohesion Enhance The Effectiveness Of Aid? New Evidence From Africa," Journal of International Commerce, Economics and Policy (JICEP), World Scientific Publishing Co. Pte. Ltd., vol. 3(01), pages 1-19.
    18. Almuth Scholl, 2009. "Aid Effectiveness and Limited Enforceable Conditionality," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 12(2), pages 377-391, April.
    19. Afees Adebare SALISU* & Fidelis O.OGWUMIKE**, 2010. "Aid-Macroeconomic Policy Environment and Growth:Evidence From Sub-Saharan Africa," Pakistan Journal of Applied Economics, Applied Economics Research Centre, vol. 20, pages 1-12.
    20. Nuruddeen USMAN & Martins.O. APINRAN, 2019. "The Impact of Aid and Macroeconomic Policy on Growth in Nigeria: A Bounds Testing Approach," Asian Economic and Financial Review, Asian Economic and Social Society, vol. 9(5), pages 581-603, May.
    21. Minoiu, Camelia & Reddy, Sanjay G., 2010. "Development aid and economic growth: A positive long-run relation," The Quarterly Review of Economics and Finance, Elsevier, vol. 50(1), pages 27-39, February.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:sae:jocore:v:54:y:2010:i:1:p:58-87. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: SAGE Publications (email available below). General contact details of provider: http://pss.la.psu.edu/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.