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More donors, more democracy

Ziaja, Sebastian

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Abstract

A country's democracy improves when it receives democracy aid from a larger number of donor countries.This finding appears surprising from a development perspective, as the presence of a large number of donors, and more generally 'fragmented aid', have been shown to impact negatively on the recipient country. But fragmented aid can be beneficial: Diversity on the donor side provides choice to the local actors involved in the process of democratization. It thus creates a 'marketplace of ideas' which increases the viability of the resulting institutions. In contraast, a highly-concentrated donor community can lead to the imposition of an institutional blueprint, designed in advance and not adapted to the needs of the recipient society. An instrumental variable analysis with panel data for 133 countries from 1994 to 2013, explicit tests of the causal mechanism, and anecdotal evidence from Ghana provide strong support for the benefits of diverse democracy aid.

Item Type: Working paper
Series Name: Discussion Paper Series
Volume: 0640
Publisher: University of Heidelberg
Place of Publication: Heidelberg
Date Deposited: 10 Nov 2017 13:37
Date: 10 November 2017
Faculties / Institutes: The Faculty of Economics and Social Studies > Alfred-Weber-Institut for Economics
Subjects: 330 Economics
Schriftenreihe ID: Discussion Paper Series / University of Heidelberg, Department of Economics
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