Democratic Aid and the Democratization of Recipients

Abstract:     
We investigate whether democracy aid flows, which are directed towards the democratization of recipients by covering democracy-related programs and government and civil society activities, affect the future political regime of recipient countries. We introduce a multinomial multivariate logit model and we use 5-year averaged data covering the period 1972-2004 for 59 democracy-aid recipient countries categorized into three broad classes according to the prevalent political regime. We find strong evidence that democracy aid flows are positively associated with the likelihood of observing a partly-democratic or a fully-democratic political regime in recipient countries and that this result is robust to the potential endogeneity of democracy assistance. We also find some evidence that democracy aid works better jointly with economic liberalization.

Keywords: democratization, democracy aid, multinomial logit, endogeneity

JEL Classifications: D70, F35, C25

Working Paper Series