Journal Article

Democracy and Aid Donorship


  • Fuchs
  • A.
  • Budjan
  • A.J.
Publication Date

Almost half of the world's states provide bilateral development assistance. While previous research takes the set of donor countries as exogenous, this article introduces a new dataset on aid giving covering all countries in the world, both rich and poor, and explores the determinants of aid donorship. It argues and shows empirically that democratic institutions support the setup of an aid program in richer countries but undermine its establishment in poorer countries. The findings hold in instrumental-variable regressions and the pattern is similar for the amount of aid.

Kiel Institute Expert


JEL Classification
D72, F35, H87, O17, O19

Key Words

  • democracy
  • foreign aid
  • new donors