More than Words and Good Intentions: The Political Agenda-Setting Power Behind Foreign Aid Mechanisms

Juan Riano

MPRA Paper from University Library of Munich, Germany

Abstract: In this paper, international aid is examined as a tool for political agenda-setting. A theoretical model is constructed for the analysis, incorporating the incentives created by foreign aid, on the political benefits of recipient governments. The model also incorporates the compensating benefits provided by these governments through the legitimization of the donor country's political agenda. The main results of this model indicate that governments which offer international assistance can influence the political agenda of recipient countries through two channels: 1) By reducing the political costs of official intervention in issues that receive aid, and 2) By generating incentives for additional political rent-seeking. The results are studied in the case of aid provided by the USA to Colombia during the period 1998-2012, which shows the power of US presidents to establish part of the Colombian political agenda related to drugs and terrorism. The results are obtained through a novel content analysis of presidential speeches in both countries and from a set of estimates corrected by possible problems of endogeneity in foreign aid allocation.

Keywords: Agenda-Setting; Foreign Aid; Content Analysis; International-Politics (search for similar items in EconPapers)
JEL-codes: F02 F35 F54 F59 (search for similar items in EconPapers)
Date: 2014-03-26
New Economics Papers: this item is included in nep-lam and nep-pol
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Working Paper: More than Words and Good Intentions: The Political Agenda-Setting Power (2014)
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:54826

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