Aid, Reform, and Interest Groups

Jac C Heckelman and Bonnie Wilson

MPRA Paper from University Library of Munich, Germany

Abstract: Employing a political economy perspective, we seek to understand the seeming failure of aid to promote institutional reform. A la Stigler's theory of regulatory capture, we suppose that institutions are determined via a process of exchange and that special interest groups may capture institutions. We interpret grants of aid as a shock to the market for institutions and hypothesize that the impact of aid on institutional reform is conditional on the influence of groups. Based on a panel of 92 aid-receiving nations, we find evidence consistent with a political economy perspective and our hypothesis. In particular, we find that aid has had a positive impact on reform in countries with especially low levels of market-orientation in institutions and middling to large numbers of groups, and that aid has been associated with back-sliding on reform in many other countries.

Keywords: aid; reform; institutions; special interest groups (search for similar items in EconPapers)
JEL-codes: O1 O19 P11 (search for similar items in EconPapers)
Date: 2023-07
New Economics Papers: this item is included in nep-dev
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://mpra.ub.uni-muenchen.de/124542/1/aid_f.pdf original version (application/pdf)
https://mpra.ub.uni-muenchen.de/124542/8/MPRA_paper_124542.pdf original version (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:124542

Access Statistics for this paper

More papers in MPRA Paper from University Library of Munich, Germany Ludwigstraße 33, D-80539 Munich, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Joachim Winter ().