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The effect of international development association's (IDA) aid on conflict. A fuzzy regression discontinuity approach

Antonis Adam and Sofia Tsarsitalidou

European Journal of Political Economy, 2022, vol. 74, issue C

Abstract: In this paper, we try to explore the relationship between the World Bank's International Development Association (IDA) aid and domestic conflict. As IDA aid is distributed only to countries that fall below an income threshold, we employ a (fuzzy) regression discontinuity approach to estimate the causal effect of aid on conflict. Our results suggest that IDA aid leads to a decrease in protest events, such as anti-government demonstrations, strikes, and riots, and in an increase in violent events that involve forms of aggression, like assassinations of political leaders, purges, and revolutions. Our results, as well as a series of robustness tests, are consistent with the view that foreign aid may increase popular support for the government, thus reducing protests, and at the same time increase conflict over lootable aid rents, and so increasing events of extreme aggression.

Keywords: Foreign aid; IDA; Conflict; Regression discontinuity (search for similar items in EconPapers)
JEL-codes: D74 F35 O11 (search for similar items in EconPapers)
Date: 2022
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DOI: 10.1016/j.ejpoleco.2021.102162

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