Natural Experiment on Foreign Aid forthcoming in AJPS

The AJPS has accepted for publication``Foreign Aid, Human Rights and Democracy Promotion: Evidence from a Natural Experiment''

Allison Carnegie and Nikolay Marinov

Abstract:

Does foreign aid improve human rights and democracy? We help arbitrate the debate over this question by leveraging a novel source of exogeneity: the rotating presidency of the Council of the European Union. We find that when a country’s former colonizer holds the presidency of the Council of the European Union during the budget-making process, the country is allocated considerably more foreign aid than are countries whose former colonizer does not hold the presidency. Using instrumental variables estimation, we demonstrate that this aid has positive effects on human rights and democracy, although the effects are short-lived after the shock to aid dissipates. We adduce the timing of events, qualitative evidence, and theoretical insights to argue that the conditionality associated with an increased aid commitment is responsible for the positive effects in the domains of human rights and democracy. 

We thank Thad Dunning, Don Green, Ken Kollman, Malte Lierl, Ken Scheve, Gerald Schneider, David Singer, Paul Staniland, and Rory Truex for helpful comments and conversations. Special thanks to Peter Aronow for partic- ularly generous assistance with the manuscript. We also thank the participants of the 2014 APSA Conference, the MacMillan International Relations Workshop at Yale University, the Yale Tools of International Pressure Workshop, and the International Relations seminar at the University of Chicago for their feedback. We thank Kassandra Birchler, Molly Offer-Westort, Kyle Peyton, Lauren Pinson, and Joon Yang for exceptional research assistance. All remaining errors are our own. 

Replication Materials: The data, code, and any additional materials required to replicate all analyses in this article are available on the American Journal of Political Science Dataverse within the Harvard Dataverse Network, at: 10.7910/DVN/PLLBQJ

First-view: 10.1111/ajps.12289