Aid, Growth and Democracy
Article first published online: 7 FEB 2003
1999 Blackwell Publishers Ltd.
Economics & Politics
Volume 11, Issue 3, pages 275–297, November 1999
How to Cite
Svensson, J. (1999), Aid, Growth and Democracy. Economics & Politics, 11: 275–297. doi: 10.1111/1468-0343.00062
- Issue published online: 7 FEB 2003
- Article first published online: 7 FEB 2003
- Cited By
To the extent that aid is justified by the benefits to the recipient, rather than to the donor, it might be reasonably judged on two criteria: growth and poverty-alleviation. We study the first of these criteria. We find that the long-run growth impact of aid is conditional on the degree of political and civil liberties in the recipient country. Aid has a positive impact on growth in countries with an institutionalized check on governmental power; that is, in more democratic countries. The data suggest, however, that if this is not the case, aid will be used to satisfy the government’s own non-productive goals. We also find that aid on average is not channeled to more democratic countries, even though there are large cross-country differences between major donors.