Working Paper: NBER ID: w7108
Authors: Alberto Alesina; Beatrice Weder
Abstract: Critics of foreign aid programs argue that these funds often support corrupt governments and inefficient bureaucracies. Supporters argue that foreign aid can be used to reward good governments. This paper documents that there is no evidence that less corrupt governments receive more foreign aid. On the contrary, according to some measures of corruption, more corrupt governments receive more aid. Also, we could not find any evidence that an increase in foreign aid reduces corruption. In summary, the answer to the question posed in the title is 'no.'
Keywords: No keywords provided
JEL Codes: No JEL codes provided
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Corruption level (D73) | Foreign aid received (F35) |
| Scandinavian donor behavior (D64) | Support for less corrupt governments (O17) |
| U.S. donor behavior (D64) | Support for more corrupt governments (D73) |
| Foreign aid (F35) | Corruption level (D73) |
| Private flows (FDI) (F21) | Response to corruption (H57) |