This paper investigates the effect of foreign aid on governance in order to extend the debate on foreign aid and to verify common positions from Moyo’s ‘Dead Aid’, Collier’s ‘Bottom Billion’ and Eubank’s ‘Somaliland’. The empirical evidence is based on updated data from 52 African countries for the period 1996–2010. An endogeneity robust instrumental variable Two-Stage-Least Squares empirical strategy is employed. The findings reveal that development assistance deteriorates economic (regulation quality and government effectiveness) and institutional (corruption-control and rule of law) governance, but has an insignificant effect on political (political stability, voice and accountability) governance. While, these findings are broadly in accordance with Moyo and Collier on weak governance, they neither confirm the Eubank position on political governance nor the Asongu stance on the aid-corruption nexus in a debate with Okada and Samreth. The use of foreign aid as an instrument to influence the elec...

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Foreign Aid and Governance in Africa

https://www.econstor.eu/bitstream/10419/113760/1/cesifo_wp5439.pdf

Aid on Demand: African Leaders and the Geography of China's Foreign Assistance

Hands Off My Regime! Governments’ Restrictions on Foreign Aid to Non-Governmental Organizations in Poor and Middle-Income Countries

世界銀行・政策研究報告書『援助を評価する:援助効果を左右するカギは何か?』(Assessing Aid: What works, what doesn't, and why)

Why do ethnic groups rebel? New data and analysis

Corrupt Governments Do Not Receive More State-to-State Aid: Governance and the Delivery of Foreign Aid through Non-State Actors

A core result of the aid allocation literature is that the quality of governance in recipient countries does not affect the amounts of foreign aid received. Donor countries may still give aid to poorly-governed countries because of a dilemma they face: those countries most in need typically also lack proper institutions. This paper argues that donors try to resolve this dilemma by delivering aid through non-state actors. Using aid shares as well as absolute amounts of aid allocated through different channels and considering different dimensions of governance, we provide evidence that bypassing governments via NGOs and multilateral organizations is indeed a response to weak recipient state institutions. The effect is stronger in aid sectors where donors can more easily switch between channels, and for the group of donors that have been dubbed 'like-minded' to indicate their specific focus on recipient need.

https://www.econstor.eu/bitstream/10419/92371/1/777911183.pdf

Martin Acht

Papers

Corrupt Governments Do Not Receive More State-to-State Aid: Governance and the Delivery of Foreign Aid through Non-State Actors

Corrupt governments receive less bilateral aid: Governance and the delivery of foreign aid through non-government actors