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Abstract
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.
Dokumententyp: | Arbeitspapier |
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Name der Reihe: | Discussion Paper Series, University of Heidelberg, Department of Economics |
Band: | 0575 |
Ort der Veröffentlichung: | Heidelberg |
Erstellungsdatum: | 21 Okt. 2014 09:58 |
Erscheinungsjahr: | Oktober 2014 |
Seitenanzahl: | 47 |
Institute/Einrichtungen: | Fakultät für Wirtschafts- und Sozialwissenschaften > Alfred-Weber Institut |
DDC-Sachgruppe: | 330 Wirtschaft |
Freie Schlagwörter: | aid effectiveness, economic growth, politics and aid, United Nations Security Council membership, political instruments |
Schriftenreihe: | Discussion Paper Series / University of Heidelberg, Department of Economics |