Do Donors Punish Countries with Restrictive NGO Laws?: A Panel Study, 1993-2009

24 Pages Posted: 24 Nov 2015

See all articles by Kendra Dupuy

Kendra Dupuy

University of Washington - Department of Political Science

Aseem Prakash

University of Washington - Department of Political Science

James Ron

University of Minnesota - Twin Cities; Centro de Investigación y Docencia Económicas (CIDE) - Division of International Studies

Date Written: November 1, 2015

Abstract

Foreign aid contributes to about 10% of gross domestic product of developing countries. To deliver aid in recipient countries, western donors increasingly rely on non-governmental organizations (NGOs). Yet, since the mid-1990s, 39 developing countries have adopted laws restricting the inflow of foreign aid to NGOs operating in their jurisdictions. Have donors punished these recipient countries by withholding aid? In this paper, we offer an empirical test of the “NGO crackdown-foreign aid” link by examining a panel of 134 aid-receiving countries for the years 1993-2012. Our empirical analyses suggest that all else equal, the adoption of a restrictive NGO finance law is associated with 15% to 57% decline in foreign aid inflows (depending on the model specification) in years subsequent to the enactment of these restrictive laws. Our finding holds even after we control for a number of alternative explanations for foreign aid flows, including poverty levels, regime type, conflict, common language, freedom of the press and other basic civil liberties, trade, religion, and memberships in intergovernmental organizations. In sum, donors are punishing countries that have enacted restrictive NGOs laws with reduced aid flows.

Keywords: civil society, NGOs, foreign funding, foreign aid, donors

Suggested Citation

Dupuy, Kendra and Prakash, Aseem and Ron, James, Do Donors Punish Countries with Restrictive NGO Laws?: A Panel Study, 1993-2009 (November 1, 2015). Available at SSRN: https://ssrn.com/abstract=2694698 or http://dx.doi.org/10.2139/ssrn.2694698

Kendra Dupuy (Contact Author)

University of Washington - Department of Political Science ( email )

101 Gowen Hall
Box 353530
Seattle, WA 98195
United States

Aseem Prakash

University of Washington - Department of Political Science ( email )

101 Gowen Hall
Box 353530
Seattle, WA 98195
United States

James Ron

University of Minnesota - Twin Cities ( email )

Minneapolis, MN
United States

Centro de Investigación y Docencia Económicas (CIDE) - Division of International Studies ( email )

Mexico City
Mexico

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