 First impressions: How leader changes affect bilateral aidTobias Rommel and Paul Schaudt Journal of Public Economics, 2020, vol. 185, issue C Abstract: This paper investigates a new mechanism to explain politically induced changes in bilateral aid. We argue that shifts in the foreign policy alignment between a donor and a recipient country following leadership changes induce reallocation of aid. Utilizing data from the G7 and 130 developing countries between 1975 and 2012 and employing high dimensional fixed effects models, we show that incoming leaders in recipient countries, which politically converge towards their current donors, receive more aid commitments, compared to those that diverge. Accounting for donor leader change, we additionally find that incumbent recipient leaders have an opportunity to get even more aid when political change in donor countries moves them closer to the donor's foreign policy position. Thus, leadership turnover in recipient and donor countries makes otherwise inconsequential deviations in foreign policy alignment highly consequential for aid provision. Keywords: Dyadic leader change; UNGA voting realignment; Development aid (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:pubeco:v:185:y:2020:i:c:s0047272719301690 DOI: 10.1016/j.jpubeco.2019.104107 Access Statistics for this article Journal of Public Economics is currently edited by R. Boadway and J. Poterba More articles in Journal of Public Economics from Elsevier |
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