Waylaid Dialectic

February 8, 2011

More Evidence that Aid has FAILED!!!

Filed under: Aid — terence @ 7:26 am

Foreign Aid, Democratization, and Civil Conflict: How Does Democracy Aid Affect Civil Conflict?
From: Burcu Savun and Daniel C. Tirone
American Journal of Political Science

Published online: 1 FEB 2011

Abstract: It has been suggested that democratizing states are prone to civil wars. However, not all democratizing states experience domestic political violence. We argue that one of the key factors that “shelters” some democratizing states from domestic political violence is the receipt of democracy aid. Democratizing states that receive high levels of democracy assistance are less likely to experience civil conflict than countries that receive little or no external democracy assistance. During democratic transitions, the central authority weakens and uncertainty about future political commitments and promises among domestic groups increases. Democracy aid decreases the risk of conflict by reducing commitment problems and uncertainty. Using an instrumental variables approach that accounts for potential endogeneity problems in aid allocation, we find empirical support for our argument. We conclude that there is a potential path to democracy that ameliorates the perils of democratization, and democracy assistance programs can play a significant positive role in this process.

Link (gated I think) here

If all you ever read was the Economist, the WSJ, the Financial Times, and certain blogs you might quite easily end up concluding that there is no evidence for the efficacy of aid. And it is true that aid has it’s problems and that it could always be improved. And that there are some changes simply beyond the means of aid. Nevertheless, it is worth remembering that there is a considerable body of evidence accumulating to suggest that aid’s track record is nowhere near as dismal as its critics suggest. And that, to an extent, and particularly in certain areas, aid can help.



  1. Except most of these studies are dodgy cross-country studies. The one you’re citing uses some fairly suspect instruments. A series of econometric studies that have been selected into journals isn’t what I would call “a considerable body of evidence”

    Comment by Matt — February 10, 2011 @ 1:35 am

  2. “A series of econometric studies that have been selected into journals” plus a within country studies, plus particular case studies, plus the best of the usual range of micro evidence. I’d call that a considerable body of evidence, at least towards the hypothesis that certain types of aid can work in certain conditions for certain objectives, which is my position.

    And I’d put it to you Matt that the evidence for this position is considerably better than the evidence supporting the conventional wisdom on aid: that it does no good and much harm.

    Comment by terence — February 10, 2011 @ 6:24 am

  3. Terence:

    “And I’d put it to you Matt that the evidence for this position is considerably better than the evidence supporting the conventional wisdom on aid: that it does no good and much harm.”

    Oh come on, while the average blogger is a little more skeptical, the conventional wisdom is certainly not “it does no good and much harm.” Most those in the industry have “aid has a positive impact” as their publicly-held null hypothesis for a long, long time..

    Within-country and case studies are never particularly robust, and the micro evidence always has an incredibly short discount rate (i.e. we know we have made an impact now, but what about 20 years from now?). Plus the micro-studies that don’t show results don’t get published as often! Despite the grumbling anti-aid lobby, the incentives just aren’t there for people to produce lots of studies that say aid doesn’t work.

    I’m not arguing that the evidence that aid is net bad, but there really is not the critical mass of evidence needed to declare victory in the long, long term. Does aid help in the short term? Probably – as you say, micro-evidence bears this out, and I don’t think anyone seriously doubts that the massive increase in health spending in the past decade has contributed to the health gains measured in SSA – but that doesn’t mean that aid works in the long run, or that it was better in the alternative. I wrote a little bit about what a preferred metric might be a while ago: http://aidthoughts.org/?p=1050

    It really is ok to say “we still don’t know whether or not aid has been a good thing or not”. We’re allowed to shrug, while we continue to rigorously assess the evidence. The danger is when you stop doing that, and start checking an “1 point for aid” box every time you read a study which supports your position.

    Comment by Matt — February 14, 2011 @ 4:28 am

  4. […] One answer could be that the average New Zealander is simply well informed and well aware of the fact that aid doesn’t work. But the best available evidence suggests that aid does work. It isn’t a panacea and its success isn’t guaranteed, but in areas such as health, education, and conflict prevention, there’s good evidence to suggest that aid assists in building better outcomes. (I’ll write more on this in a future post but, for now, for examples, see here, here, and here). […]

    Pingback by Good News is no News, and that’s Bad News | Development Policy blog — March 17, 2011 @ 7:03 am

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