Publishing Institution: United Nations University / Publication Year: within 10 Years / Topic: Foreign Aid

Author:: Miguel Niño-Zarazúa, Ana Horigoshi, and Rachel M. Gisselquist
Publication Date:: 02-2022
Content Type:: Working Paper
Institution:: United Nations University
Abstract:: This paper investigates the impact of foreign aid on democratic outcomes using a panel of countries for the period between 1995 and 2018. In so doing, it speaks to a major critique of foreign aid, which is that it negatively impacts democratic governance. The analysis distinguishes between developmental aid and democracy aid, and examines democracy aid to specific sectors, in order to explore variation across different aid types. It draws on the Organisation for Economic Co-operation and Development’s (OECD) Creditor Reporting System (CRS) data on foreign aid and indices of democracy from the Varieties of Democracy project, employing a combination of a maximum likelihood estimation and structural equation modelling (ML-SEM) model and fixed effects models. Overall, using a more extensive set of data and methods than previous analyses, we offer comprehensive evidence pointing to aid having a positive if modest impact on democratic outcomes. Our analysis suggests this effect is more significant for democracy aid than developmental aid, but there is no evidence of negative impact for either. These results are robust to multiple specifications.
Topic:: Development, Foreign Aid, and Democracy
Political Geography:: Global Focus

Author:: Rachel M. Gisselquist
Publication Date:: 02-2017
Content Type:: Policy Brief
Institution:: United Nations University
Abstract:: Development assistance to fragile states and conflict-affected areas is a core component of peacebuilding. It includes support for the restoration of core government functions, delivery of basic services, the rule of law, and economic revitalization. Yet, while aid has been among the largest financial inflows to fragile states in recent years, its impact has been mixed. Better understanding of what works and why thus remains a core challenge for development researchers and practitioners.
Topic:: Development, Economics, Foreign Aid, Conflict, and Peace
Political Geography:: Global Focus

Author:: Channing Arndt and Finn Tarp
Publication Date:: 12-2017
Content Type:: Policy Brief
Institution:: United Nations University
Abstract:: Development aid by itself cannot ‘save the planet’. Yet, development aid and institutions have the potential to remain important catalytic actors in achieving developmental and global environmental objectives. Developing countries must be crucial players in successful climate change mitigation as they are responsible for 88% of the growth in greenhouse gas (GHG) emissions since 1970. However, the current aid architecture — which was designed in the 1970s when environmental issues were a distant concern — is not well suited to support environmental challenges that extend beyond low-income countries.
Topic:: Climate Change, Development, Environment, and Foreign Aid
Political Geography:: Global Focus

Author:: Rachel M. Gisselquist and Danielle Resnick
Publication Date:: 11-2016
Content Type:: Policy Brief
Institution:: United Nations University
Abstract:: Aiding government effectiveness in developing countries has been a priority issue for the international donor community since the 1990s. With the Paris Declaration in 1994, donors further committed to aiding government effectiveness in a manner consistent with local ownership and harmonization with national development objectives. These issues have received renewed attention in discussions surrounding the Sustainable Development Goals, which have highlighted the importance of effective governance and institutions.
Topic:: Development, Foreign Aid, Governance, and Inclusion
Political Geography:: Global Focus

Author:: Tony Addison and Finn Tarp
Publication Date:: 08-2015
Content Type:: Policy Brief
Institution:: United Nations University
Abstract:: The design and implementation of effective aid policy requires a deeper understanding of the impact of aid and the overall environment in which development aid operates. This policy brief addresses four areas which are key to understanding how aid works: the relationship between aid and economic growth, the effects of aid volatility, the benefits of co-operation, and the macroeconomic management of aid flows.
Topic:: Foreign Aid, Economic Growth, and Macroeconomics
Political Geography:: Global Focus

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