Democracy and Aid Donorship

Angelika J. Budjan and Andreas Fuchs

American Economic Journal: Economic Policy, 2021, vol. 13, issue 4, 217-38

Abstract: Almost half of the world's states provide bilateral development assistance. While previous research takes the set of donor countries as exogenous, this article introduces a new dataset on aid giving that covers all countries in the world, both rich and poor, and explores the determinants of aid donorship. It argues and shows empirically that democratic institutions support the setup of an aid program in richer countries but undermine its establishment in poorer countries. The findings hold in instrumental-variable regressions and the pattern is similar for the amount of aid.

JEL-codes: D72 F35 H87 O17 O19 (search for similar items in EconPapers)
Date: 2021
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Citations: View citations in EconPapers (5)

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DOI: 10.1257/pol.20180582

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