Geopolitics, Aid, and Growth : The Impact of UN Security Council Membership on the Effectiveness of Aid
The paper investigates the effects of short-term political motivations on the effectiveness of foreign aid. Specifically, the paper tests whether the effect of aid on economic growth is reduced by the share of years a country served on the United N...
| Main Authors: | , , |
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| Format: | Working Paper |
| Language: | English en_US |
| Published: |
World Bank, Washington, DC
2016
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/2016/07/26601455/geopolitics-aid-growth-impact-un-security-council-membership-effectiveness-aid http://hdl.handle.net/10986/24852 |
| Summary: | The paper investigates the effects of
short-term political motivations on the effectiveness of
foreign aid. Specifically, the paper tests whether the
effect of aid on economic growth is reduced by the share of
years a country served on the United Nations Security
Council (UNSC) in the period the aid is committed, which
provides quasi-random variation in aid. The results show
that the effect of aid on growth is significantly lower when
aid was committed during a country's tenure on the
UNSC. This holds when we restrict the sample to Africa,
which follows the strictest norm of rotation on the UNSC and
thus where UNSC membership can most reliably be regarded as
exogenous. Two conclusions arise from this. First,
short-term political favoritism reduces the effectiveness of
aid. Second, results of studies using political interest
variables as instruments for overall aid arguably estimate
the effect of politically motivated aid and thus a lower
bound for the effect of all aid. |
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