Aid us to win the elections : foreign aid and voter turnout

Kunčič, Aljaž (author)

We use an innovative procedure to determine the effect of foreign aid on institutions of governance. We use voter turnout as an indicator variable which allows us to identify whether political competition in a country is based on private goods, such as votebuying, or on public goods. We suggest that the marginal effect of foreign aid on voter turnout depends on the wider underlying institutional setting. Contrary to popular belief, the theoretical model implies that a higher voter turnout in response to foreign aid can be undesirable when the increase is a consequence of vote-buying in the electoral campaign. The empirical evidence we examine is consistent with private-goods political competition, i.e., political parties use foreign aid for vote-buying and similar electoral tactics, particularly when the underlying institutions are sufficiently bad. This is consistently estimated across specifications which address a range of endogeneity sources.

• Language: English
• Work type: Not categorized
• Typology: 1.01 - Original Scientific Article
• Organization: FDV - Faculty of Social Sciences
• Year: 2011
• Number of pages: Str. 233-265
• Numbering: Vol. 49, no. 3
• PID: 20.500.12556/RUL-45263
• UDC: 339.96:324
• ISSN on article: 0012-1533
• COBISS.SI-ID: 30569821
• Publication date in RUL: 10.07.2015

Record is a part of a journal

• Title: Developing economies
• Shortened title: Dev. econ.
• Publisher: Institute of Developing Economies
• ISSN: 0012-1533
• COBISS.SI-ID: 19566941