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Does aid buy votes?

Author

Listed:
  • Paolo Pinotti

    (Banca d'Italia)

  • Riccardo Settimo

    (Banca d'Italia)

Abstract

We use data for 143 developing countries during the period 1980-2004 to study empirically the relationship between multilateral aid (as proxied by IDA flows) and support for US foreign policy, as measured by voting alignment at the United Nations General Assembly. Our identifica�tion strategy exploits exogenous variations in international commodity prices and natural disasters to address causality from aid to voting. Our results suggest that, even though multilateral and bilateral aid flows are both associated with greater voting alignment, the causal effect of multilateral aid is not significantly different from zero. This result is robust to controlling for other determinants of voting patterns, for unobserved heterogeneity at the country level and for common time trends.

Suggested Citation

  • Paolo Pinotti & Riccardo Settimo, 2011. "Does aid buy votes?," Questioni di Economia e Finanza (Occasional Papers) 101, Bank of Italy, Economic Research and International Relations Area.
    • Handle: RePEc:bdi:opques:qef_101_11
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    File URL: https://www.bancaditalia.it/pubblicazioni/qef/2011-0101/QEF_101.pdf
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    References listed on IDEAS

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    More about this item

    Keywords

    foreign aid; UN Assembly; voting; international financial institutions;
    All these keywords.

    JEL classification:

    • F35 - International Economics - - International Finance - - - Foreign Aid
    • O10 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - General

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