%0 Generic
%A Dreher, Axel 
%A Eichenauer, Vera 
%A Gehring, Kai 
%C Heidelberg
%D 2014
%F heidok:17545
%K aid effectiveness, economic growth, politics and aid, United Nations Security Council membership, political instruments 
%R 10.11588/heidok.00017545
%T Geopolitics, Aid and Growth
%U https://archiv.ub.uni-heidelberg.de/volltextserver/17545/
%V 0575
%X 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.