Skip to main content
Article thumbnail
Location of Repository

Politics and the effectiveness of foreign aid

By P. Boone


Critics of foreign aid programs have long argued that poverty reflects government failure. In this paper I analyze the effectiveness of foreign aid programs to gain insights into political regimes in aid recipient countries. My analytical framework shows how three stylized political/economic regimes labeled egalitarian, elitist and laissez-faire would use foreign aid. I then test reduced form equations using data on nonmilitary aid flows to 96 countries. I find that models of elitist political regimes best predict the impact of foreign aid. Aid does not significantly increase investment and growth, nor benefit the poor as measured by improvements in human development indicators, but it does increase the size of government. I also find that the impact of aid does not vary according to whether recipient governments are liberal democracies or highly repressive. But liberal political regimes and democracies, ceteris paribus, have on average 30% lower infant mortality than the least free regimes. This may be due to greater empowerment of the poor under liberal regimes eve though the political elite continues to receive the benefits of aid programs. An implication is that short term aid targeted to support new liberal regimes may be a more successful means of reducing poverty than current programs

Topics: JA Political science (General), HV Social pathology. Social and public welfare. Criminology
Publisher: Centre for Economic Performance, London School of Economics and Political Science
Year: 1995
OAI identifier:
Provided by: LSE Research Online

Suggested articles


  1. (1992). A Contribution to the Empirics of Economic Growth=, doi
  2. (1983). A Theory of Competition among Pressure Groups for Political Influence=, doi
  3. (1994). Adjusting to Policy Failure in African Economies, doi
  4. (1988). Aid and Growth in Sub-Saharan Africa: The Recent Experience=, doi
  5. (1991). Aid and Power: The World Bank and Policy Based Lending, doi
  6. (1973). Aid, Foreign Private Investment, Savings and Growth in Less Developed Countries=, doi
  7. (1990). American Foreign Aid and Global Power Projection: The Geopolitics of Resource Allocatio,
  8. (1993). and Khilji and Zampelli
  9. (1987). Anticipated Development Assistance and Temporary Relief Aid=, doi
  10. (1987). Autocracy, Lancaster and Dordrecht; Kluwer Academic: doi
  11. (1994). Can Foreign Aid Accelerate Stabilization=, doi
  12. (1970). Development Alternatives for Latin America=, doi
  13. (1993). Dictatorship, Democracy, and Development=, doi
  14. (1986). Dreze and Sen
  15. (1993). Foreign Aid and the Question of Fungibility=, doi
  16. Freedom in the World: Political Rights and Civil Liberties 1988-1989, doi
  17. (1993). Galton's Fallacy and Tests of the Convergence Hypothesis=, doi
  18. (1990). Government Spending in a Simple Model of Endogenous Growth=, doi
  19. (1994). Growth and Democracy=, mimeo, doi
  20. (1992). Hunger and Public Action, doi
  21. (1991). Ideological Conviction and Persuasion in the Rent-Seeking Society=, doi
  22. (1986). Increasing Returns and Long-run Growth.@ doi
  23. (1990). Is Foreign Aid Fungible? The Case of Indonesia=, doi
  24. (1984). Motivations for Aid to Developing Countries=, World Development, doi
  25. (1982). of Income, Illiteracy and Medical Care as Determinants of Infant Mortality in Underdeveloped Countries=, doi
  26. (1988). On the Mechanics of Economic Development=, doi
  27. (1992). Organization for Economic Cooperation and Development, doi
  28. (1989). Political Competition among Interest Groups=, in doi
  29. (1985). Pressure Groups and Political Behavior=
  30. (1989). Public Choice II, doi
  31. (1985). Public Policies, Pressure Groups, and Dead Weight Costs@, doi
  32. (1992). Regression toward Mediocrity in
  33. (1986). Routes to Low Mortality in Poor Countries=, doi
  34. (1994). Russia's Struggle with Stabilization: Conceptual Issues and Evidence=, paper presented at
  35. (1978). The French Aid Relationship: A Foreign Policy Model of the Distribution of French Bilateral Aid: 1964-1970=, doi
  36. (1991). The Fungibility of US Assistance to Developing Countries and the Impact on Recipient Expenditures: A Case Study of Pakistan=, World Development, doi
  37. (1972). The Impact of Foreign Capital Inflow on Domestic Savings in Underdeveloped Countries=, doi
  38. (1994). The one exception to this is Trumbull and Wall
  39. (1987). The Optimal Collection of Seigniorage: Theory and Evidence=, doi
  40. (1993). The Oxford Companion to Politics of the World,
  41. (1990). The Stages Of Economic Growth: A Non-communist Manifesto, third ed, doi
  42. (1992). The State in Africa: The Politics of the Belly, doi
  43. (1979). The US Aid Relationship: A test of the Recipient Need and Donor Interest Models=, doi
  44. (1990). Why Doesn't Capital Flow from Rich to Poor Countries?=, doi
  45. (1993). Why Is Rent-Seeking So Costly to Growth?=, doi

To submit an update or takedown request for this paper, please submit an Update/Correction/Removal Request.