Democracy Aid, Democratization and Civil Conflict: How Does Aid Affect Civil Conflict?

Abstract

It has been suggested that democratizing states are prone to civil wars. However, not all democratizing states experience domestic political violence. This paper investigates this puzzle. We argue that one of the key factors that “shelters” democratizing states from domestic political violence is the receipt of external democracy aid. States that receive democracy assistance are less likely to experience civil conflict than countries with no or little external democracy assistance. During democratic transitions, the central state weakens and uncertainty about future political commitments and promises increases. Democracy aid reduces the risk of conflict by bolstering state strength and reducing commitment problems and uncertainty. Using an instrumental variable approach that accounts for potential endogeneity problems, we find strong 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.

Keywords: foreign aid, democracy promotion, democratization, civil war