Geopolitics, Aid, and Growth : The Impact of UN Security Council Membership on the Effectiveness of Aid

We investigate the effects of short-term political motivations on the effectiveness of foreign aid. Specifically, we test 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, w...

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Main Authors:	Dreher, Axel, Eichenauer, Vera Z., Gehring, Kai
Format:	Journal Article
Published:	Published by Oxford University Press on behalf of the World Bank 2019
Subjects:	AID EFFECTIVENESS FOREIGN AID OFFICIAL DEVELOPMENT ASSISTANCE POLITICAL INSTRUMENTS POLITICS UNITED NATIONS SECURITY COUNCIL
Online Access:	http://hdl.handle.net/10986/32777

id	okr-10986-32777
recordtype	oai_dc
spelling	okr-10986-327772021-05-25T10:54:37Z Geopolitics, Aid, and Growth : The Impact of UN Security Council Membership on the Effectiveness of Aid Dreher, Axel Eichenauer, Vera Z. Gehring, Kai AID EFFECTIVENESS FOREIGN AID OFFICIAL DEVELOPMENT ASSISTANCE POLITICAL INSTRUMENTS POLITICS UNITED NATIONS SECURITY COUNCIL We investigate the effects of short-term political motivations on the effectiveness of foreign aid. Specifically, we test 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. Our 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. We derive two conclusions 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. 2019-12-04T21:44:15Z 2019-12-04T21:44:15Z 2018-06 Journal Article World Bank Economic Review 1564-698X http://hdl.handle.net/10986/32777 CC BY-NC-ND 3.0 IGO http://creativecommons.org/licenses/by-nc-nd/3.0/igo World Bank Published by Oxford University Press on behalf of the World Bank Publications & Research Publications & Research :: Journal Article Africa Africa Sub-Saharan Africa
repository_type	Digital Repository
institution_category	Foreign Institution
institution	Digital Repositories
building	World Bank Open Knowledge Repository
collection	World Bank
topic	AID EFFECTIVENESS FOREIGN AID OFFICIAL DEVELOPMENT ASSISTANCE POLITICAL INSTRUMENTS POLITICS UNITED NATIONS SECURITY COUNCIL
spellingShingle	AID EFFECTIVENESS FOREIGN AID OFFICIAL DEVELOPMENT ASSISTANCE POLITICAL INSTRUMENTS POLITICS UNITED NATIONS SECURITY COUNCIL Dreher, Axel Eichenauer, Vera Z. Gehring, Kai Geopolitics, Aid, and Growth : The Impact of UN Security Council Membership on the Effectiveness of Aid
geographic_facet	Africa Africa Sub-Saharan Africa
description	We investigate the effects of short-term political motivations on the effectiveness of foreign aid. Specifically, we test 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. Our 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. We derive two conclusions 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.
format	Journal Article
author	Dreher, Axel Eichenauer, Vera Z. Gehring, Kai
author_facet	Dreher, Axel Eichenauer, Vera Z. Gehring, Kai
author_sort	Dreher, Axel
title	Geopolitics, Aid, and Growth : The Impact of UN Security Council Membership on the Effectiveness of Aid
title_short	Geopolitics, Aid, and Growth : The Impact of UN Security Council Membership on the Effectiveness of Aid
title_full	Geopolitics, Aid, and Growth : The Impact of UN Security Council Membership on the Effectiveness of Aid
title_fullStr	Geopolitics, Aid, and Growth : The Impact of UN Security Council Membership on the Effectiveness of Aid
title_full_unstemmed	Geopolitics, Aid, and Growth : The Impact of UN Security Council Membership on the Effectiveness of Aid
title_sort	geopolitics, aid, and growth : the impact of un security council membership on the effectiveness of aid
publisher	Published by Oxford University Press on behalf of the World Bank
publishDate	2019
url	http://hdl.handle.net/10986/32777
_version_	1764477274676002816

Geopolitics, Aid, and Growth : The Impact of UN Security Council Membership on the Effectiveness of Aid

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