Geopolitics, Aid and Growth

Arbeitspapier

We investigate the effects of short-term political motivations on the effectiveness of foreign aid. Specifically, we test whether the effect of aid on economic growth is reduced by the share of years a country has served on the United Nations Security Council (UNSC) in the period the aid has been committed, which provides quasi-random variation in aid. Our results show that the relationship of aid with growth is significantly lower when aid has been committed during a country’s tenure on the UNSC. We derive two conclusions from this. First, short-term political favoritism reduces growth. Second, political interest variables are inadequate as instruments for overall aid, raising doubts about a large number of results in the aid effectiveness literature.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Discussion Paper Series ; No. 575

Classification and Topics

• Classification: Wirtschaft
• Subject: aid effectiveness ; economic growth ; politics and aid ; United Nations Security Council membership ; political instruments

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Dreher, Axel ; Eichenauer, Vera ; Gehring, Kai
• Event: Veröffentlichung
• (who): University of Heidelberg, Department of Economics
• (where): Heidelberg
• (when): 2014

Further information

• DOI: doi:10.11588/heidok.00017545
• Handle: http://hdl.handle.net/10419/127395
• URN: urn:nbn:de:bsz:16-heidok-175459
• Last update: 10.03.2025, 11:44 AM CET