Political Institutions and Aid Effectiveness in Autocracies

• In Event: Politics and Aid Effectiveness

Abstract

One of the stylized arguments in foreign assistance literature is that foreign aid is fungible within authoritarian countries _ that is, political leaders have incentives to use aid resources for their personal consumption and political patronage. Surprisingly, few studies have examined the considerable variation in institutional settings of non-democratic countries, which impose different levels of constraints on leaders’ behavior. In this article, I argue that autocracies with similar political institutions as democracies (e.g., legislatures), are more likely to use aid resources effectively. First, legislatures serve as veto players in decision making which constrain leaders’ incentives to manipulate aid for personal and political purposes. Second, legislators build connections with their local constituencies, which enables them to gather information about the economic needs and preferences of the citizens, and thus, influence the use of foreign aid resources in a manner that meets the needs of their constituency members. Using panel data on 85 authoritarian countries from 1970 to 2008, I find evidence that authoritarian legislatures promote aid effectiveness: foreign aid has a greater positive effect in autocracies with legislatures than those without legislatures.

Author

• Oluwaseun Emmanuel Okajare, Texas Tech University