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Does Foreign Aid Promote Democracy?

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  • Thierry Kangoye

Abstract

This study revisits the effect of aid on the quality of institutions and examines the effects of a major source of instability, namely terms-of-trade instability, on the quality of democracy. We take advantage of previous empirical findings which explain the role of aid in mitigating the adverse effects of external shocks, and argue that in the long term, aggregate aid flows can potentially dampen the effects of terms-of-trade instability on the quality of democracy.

Suggested Citation

  • Thierry Kangoye, 2011. "Does Foreign Aid Promote Democracy?," WIDER Working Paper Series wp-2011-064, World Institute for Development Economic Research (UNU-WIDER).
    • Handle: RePEc:unu:wpaper:wp-2011-064
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    File URL: https://www.wider.unu.edu/sites/default/files/wp2011-064.pdf
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    2. 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.
    3. Zohid Askarov & Hristos Doucouliagos, 2013. "Does aid improve democracy and governance? A meta-regression analysis," Public Choice, Springer, vol. 157(3), pages 601-628, December.

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