Opening the black box of international aid: understanding delivery actors and democratization

Abstract

Donor states may delegate to other actors to deliver aid through partnerships. We ask whether some partnerships are more effective than others with democratization aid. We identify five actors, arguing that they can affect the recipient’s democracy outcomes via the fungibility of the funds. We hypothesize that organizations that have relationships of accountability and dependency to the donor are most likely to use aid for its intended purposes (least fungible), making them the most likely to see positive effects on democratization. Those that do not have these relationships may use the money for other purposes, making them the least likely to see positive effects on democratization. We test these with data from 32 OECD countries and 126 recipients from 2004 to 2018. Using the electoral indicator from the Varieties of Democracy project, we find that NGO- and IGO-delivered aid is associated with significantly larger increases in a democracy than aid delivered by corporations.

This is a preview of subscription content, access via your institution.

Fig. 1
Fig. 2
Fig. 3
Fig. 4
Fig. 5

Notes

  1. 1.

    The Black Box term is also used in: Arndt et al. (2011) and Bourguignon and Sundberg (2007).

  2. 2.

    For more on tax revenue, see also: Morrison (2009, 107).

  3. 3.

    For broader work on linkage and leverage in comparative politics, see: Levitsky and Way (2005); And for broader comparative politics arguments on international effects on democratization, see: Gleditsch and Ward (2006).

  4. 4.

    Extensive methodological insights regarding ‘effectiveness’ are described by Heiss and Kelley (2017).

  5. 5.

    Further, there is a literature on the role of international organizations and their effect on democratization or peace, but it is less relevant because it does not apply to their donor policies, but rather broader effects such as credibility of commitments to global audiences in the process of democratization (Mansfield and Pevehouse 2008; Pevehouse and Russett 2006).

  6. 6.

    See also Bader and Faust (2014).

  7. 7.

    We originally created two codings for democratization aid. The first, a "narrow" coding, only includes 21 codes under the "Government and Civil Society" category that would clearly be intended to increase democracy in the country. The "broader" coding includes 76 codes across many categorizations of aid that would intuitively benefit democracy. A full list of codes is available in Online Appendix D1 and D2 , respectively. While we only report the results of the broader coding her, the narrow coding is available in Online Appendix C9.

  8. 8.

    For example: Birchler et al. (2016).

References

  1. Abouassi, K., and D.L. Trent. 2016. NGO Accountability from an NGO Perspective: Perceptions, Strategies, and Practices: NGO Accountability: Perceptions, Strategies, and Practices. Public Administration and Development 36(4): 283–296.

    Article  Google Scholar 

  2. Aickin, M., and H. Gensler. 1996. Adjusting for Multiple Testing when Reporting Research Results: The Bonferroni vs Holm Methods. American Journal of Public Health 86(5): 726–728. https://doi.org/10.2105/AJPH.86.5.726.

    Article  Google Scholar 

  3. Arndt, C., S. Jones and F. Tarp. 2011. Aid Effectiveness: Opening the Black Box. Helsinki: WIDER. http://hdl.handle.net/10419/54008. Accessed 29 June 2020.

  4. Arndt, C., S. Jones, and F. Tarp. 2015. Assessing Foreign Aid’s Long-Run Contribution to Growth and Development. World Development 69: 6–18.

    Article  Google Scholar 

  5. Bader, J., and J. 2014. Faust. Foreign Aid, Democratization, and Autocratic Survival. International Studies Review 16(4): 575–595. https://doi.org/10.1111/misr.12158.

  6. Bermeo, S.B. 2011. Foreign Aid and Regime Change: A Role for Donor Intent. World Development 39(11): 2021–2031. https://doi.org/10.1016/j.worlddev.2011.07.019.

    Article  Google Scholar 

  7. Bermeo, S.B. 2016. Aid Is Not Oil: Donor Utility, Heterogeneous Aid, and the Aid-Democratization Relationship. International Organization 70(01): 1–32. https://doi.org/10.1017/S0020818315000296.

    Article  Google Scholar 

  8. Bermeo, S.B. 2017. Aid Allocation and Targeted Development in an Increasingly Connected World. International Organization 71(04): 735–766. https://doi.org/10.1017/S0020818317000315.

    Article  Google Scholar 

  9. Birchler, K., S. Limpach, and K. Michaelowa. 2016. Aid Modalities Matter: The Impact of Different World Bank and IMF Programs on Democratization in Developing Countries. International Studies Quarterly 60(3): 427–439. https://doi.org/10.1093/isq/sqw014.

    Article  Google Scholar 

  10. Bourguignon, F., and M. Sundberg. 2007. Aid Effectiveness: Opening the Black Box. The American Economic Review 97(2): 316–321.

    Article  Google Scholar 

  11. Bush, S.S. 2016. The Taming of Democracy Assistance: Why Democracy Promotion Does Not Confront Dictators. Cambridge, UK: Cambridge University Press.

    Google Scholar 

  12. Carnegie, A., and N. Marinov. 2017. Foreign Aid, Human Rights, and Democracy Promotion: Evidence from a Natural Experiment. American Journal of Political Science 61(3): 671–683.

    Article  Google Scholar 

  13. de Mesquita, B.B., and A. Smith. 2007. Foreign Aid and Policy Concessions. Journal of Conflict Resolution 51(2): 251–284. https://doi.org/10.1177/0022002706297696.

    Article  Google Scholar 

  14. Dietrich, S. 2013. Bypass or Engage? Explaining Donor Delivery Tactics in Foreign Aid Allocation*: Bypass or Engage?. International Studies Quarterly 57(4): 698–712. https://doi.org/10.1111/isqu.12041.

    Article  Google Scholar 

  15. Dietrich, S. 2016. Donor Political Economies and the Pursuit of Aid Effectiveness. International Organization 70(01): 65–102. https://doi.org/10.1017/S0020818315000302.

    Article  Google Scholar 

  16. Dietrich, S., and A. Murdie. 2017. Human Rights Shaming Through INGOs and Foreign Aid Delivery. The Review of International Organizations 12(1): 95–120. https://doi.org/10.1007/s11558-015-9242-8.

    Article  Google Scholar 

  17. Dietrich, S., and J. Wright. 2015. Foreign Aid Allocation Tactics and Democratic Change in Africa. The Journal of Politics 77(1): 216–234. https://doi.org/10.1086/678976.

    Article  Google Scholar 

  18. DiLorenzo, M. 2018. Bypass Aid and Unrest in Autocracies. International Studies Quarterly 62(1): 208–219. https://doi.org/10.1093/isq/sqx084.

    Article  Google Scholar 

  19. Djankov, S., J.G. Montalvo, and M. Reynal-Querol. 2008. The Curse of Aid. Journal of Economic Growth 13(3): 169–194. https://doi.org/10.1007/s10887-008-9032-8.

    Article  Google Scholar 

  20. Dunning, T. 2004. Conditioning the Effects of Aid: Cold War Politics, Donor Credibility, and Democracy in Africa. International Organization 58(02): 409–423. https://doi.org/10.1017/S0020818304582073.

    Article  Google Scholar 

  21. Findley, M.G., A.S. Harris, H.V. Milner, et al. 2017. Who Controls Foreign Aid? Elite versus Public Perceptions of Donor Influence in Aid-Dependent Uganda. International Organization 71(04): 633–663. https://doi.org/10.1017/S0020818317000273.

    Article  Google Scholar 

  22. Finkel, S., A. Perez-Linan, and M.A. Seligson. 2007. The Effects of U.S. Foreign Assistance on Democracy Building, 1990–2003. World Politics 59(3): 404–440.

    Article  Google Scholar 

  23. Gent, S.E., M.J.C. Crescenzi, E.J. Menninga, et al. 2015. The Reputation Trap of NGO Accountability. International Theory 7(3): 426–463. https://doi.org/10.1017/S1752971915000159.

    Article  Google Scholar 

  24. Gershman, C., and M. Allen. 2006. The Assault on Democracy Assistance. Journal of Democracy 17(2): 36–51.

    Article  Google Scholar 

  25. Gibson, C.C., B.D. Hoffman, and R.S. Jablonski. 2015. Did Aid Promote Democracy in Africa? The Role of Technical Assistance in Africa’s Transitions. World Development 68: 323–335. https://doi.org/10.1016/j.worlddev.2014.11.009.

    Article  Google Scholar 

  26. Gleditsch, K.S., and M.D. Ward. 2006. Diffusion and the International Context of Democratization. International Organization 60(4). https://doi.org/10.1017/S0020818306060309.

  27. Hariri, J.G. 2015. Foreign Aided: Why Democratization Brings Growth When Democracy Does Not. British Journal of Political Science 45(01): 53–71.

    Article  Google Scholar 

  28. Heiss, A., and J. Kelley. 2017. Between a Rock and a Hard Place: International NGOs and the Dual Pressures of Donors and Host Governments. The Journal of Politics 79(2): 732–741. https://doi.org/10.1086/691218.

    Article  Google Scholar 

  29. Kleibl, J. 2013. Tertiarization, Industrial Adjustment, and the Domestic Politics of Foreign Aid. International Studies Quarterly 57(2): 356–369. https://doi.org/10.1111/j.1468-2478.2012.00754.x.

    Article  Google Scholar 

  30. Knack, S. 2004. Does Foreign Aid Promote Democracy? International Studies Quarterly 48(1): 251–266. https://doi.org/10.1111/j.0020-8833.2004.00299.x.

    Article  Google Scholar 

  31. Levitsky, S. and L. Way. 2005. International Linkage and Democratization. Journal of Democracy 16(3): 20–34. https://doi.org/10.1353/jod.2005.0048.

  32. Mansfield, E.D., and J.C. Pevehouse. 2008. Democratization and the Varieties of International Organizations. Journal of Conflict Resolution 52(2): 269–294. https://doi.org/10.1177/0022002707313691.

    Article  Google Scholar 

  33. McLean, E.V. 2012. Donors’ Preferences and Agent Choice: Delegation of European Development Aid1: Donors’ Preferences and Agent Choice. International Studies Quarterly 56(2): 381–395. https://doi.org/10.1111/j.1468-2478.2012.00727.x.

    Article  Google Scholar 

  34. Milner, H.V. 2006. Why Multilateralism? Foreign Aid and Domestic Principal-agent Problems. In Delegation and Agency in International Organizations, ed. D.G. Hawkins, D.A. Lake, D.L. Nielson, et al., 107–139. Cambridge: Cambridge University Press. https://doi.org/10.1017/CBO9780511491368.005.

    Google Scholar 

  35. Morrison, K.M. Oil, Nontax Revenue, and the Redistributional Foundations of Regime Stability. International Organization 63(1): 107. https://doi.org/10.1017/S0020818309090043.

  36. OECD. 2018. What is ODA? http://www.oecd.org/dac/stats/What-is-ODA.pdf.

  37. Pevehouse, J., and B. Russett. 2006. Democratic International Governmental Organizations Promote Peace. International Organization. https://doi.org/10.1017/S0020818306060322.

    Article  Google Scholar 

  38. Prakash, A., and M.K. Gugerty. 2010. In Advocacy Organizations and Collective Action, ed. A. Prakash and M.K. Gugerty, 1–28. Cambridge: Cambridge University Press. https://doi.org/10.1017/CBO9780511762635.002.

    Google Scholar 

  39. Remmer, K.L. 2004. Does Foreign Aid Promote the Expansion of Government? American Journal of Political Science 48(1): 77–92. https://doi.org/10.1111/j.0092-5853.2004.00057.x.

    Article  Google Scholar 

  40. Resnick, D., and N. van de Walle. 2013. Introduction: Why Aid and Democracy? Why Africa? In Democratic Trajectories in Africa: Unravelling the Impact of Foreign Aid, 1st ed., ed. D. Resnick and N. van de Walle. UNU-WIDER Studies in Development Economics. Oxford: Oxford University Press.

    Google Scholar 

  41. Rogin, J. 2018. The Trump Administration Wants to Dismantle Ronald Reagan’s ‘Infrastructure of Democracy’. The Washington Post, 4 March. https://www.washingtonpost.com/opinions/global-opinions/the-trump-administration-wants-to-dismantle-ronald-reagans-infrastructure-of-democracy/2018/03/04/8b94d7f6-1e54-11e8-ae5a-16e60e4605f3_story.html?utm_term=.1eaa5afda0a0.

  42. Schneider, C.J., and J.L. Tobin. 2016. Portfolio Similarity and International Development Aid. International Studies Quarterly 60(4): 647–664. https://doi.org/10.1093/isq/sqw037.

    Article  Google Scholar 

  43. Scott, J.M., and C.A. Steele. 2011. Sponsoring Democracy: The United States and Democracy Aid to the Developing World, 1988–2011: Sponsoring Democracy. International Studies Quarterly 55(1): 47–69. https://doi.org/10.1111/j.1468-2478.2010.00635.x.

    Article  Google Scholar 

  44. Steinwand, M.C. 2015. Compete or Coordinate? Aid Fragmentation and Lead Donorship. International Organization 69(2): 443–472. https://doi.org/10.1017/S0020818314000381.

    Article  Google Scholar 

  45. Strassburger, K., and F. Bretz. 2008. Compatible Simultaneous Lower Confidence Bounds for the Holm Procedure and Other Bonferroni-Based Closed Tests. Statistics in Medicine 27(24): 4914–4927. https://doi.org/10.1002/sim.3338.

    Article  Google Scholar 

  46. Stroup, S. S. 2016. Borders Among Activists: International NGOs in the United States, Britain, and France. https://doi.org/10.7591/cornell/9780801450730.001.0001. Accessed 29 June 2020.

  47. Tremblay-Boire, J., A. Prakash, and M.K. Gugerty. 2016. Regulation by Reputation: Monitoring and Sanctioning in Nonprofit Accountability Clubs. Public Administration Review 76(5): 712–722.

    Article  Google Scholar 

  48. Winters, M.S. 2010. Accountability, Participation and Foreign Aid Effectiveness: Accountability, Participation and Foreign Aid Effectiveness. International Studies Review 12(2): 218–243.

    Article  Google Scholar 

  49. Winters, M.S. 2014. Targeting, Accountability and Capture in Development Projects. International Studies Quarterly 58(2): 393–404.

    Article  Google Scholar 

  50. Wright, J. 2009. How Foreign Aid Can Foster Democratization in Authoritarian Regimes. American Journal of Political Science 53(3): 552–571.

    Article  Google Scholar 

Download references

Funding

This research did not receive any specific grant from funding agencies in the public, commercial, or not-for-profit sectors.

Author information

Affiliations

Authors

Corresponding author

Correspondence to Caroline Dunton.

Ethics declarations

Conflict of interest

The authors have no conflict of interest to declare.

Additional information

Publisher's Note

Springer Nature remains neutral with regard to jurisdictional claims in published maps and institutional affiliations.

Supplementary Information

Below is the link to the electronic supplementary material.

Supplementary Information (356 KB)

Rights and permissions

Reprints and Permissions

About this article

Verify currency and authenticity via CrossMark

Cite this article

Dunton, C., Hasler, J. Opening the black box of international aid: understanding delivery actors and democratization. Int Polit (2021). https://doi.org/10.1057/s41311-020-00276-y

Download citation

Keywords

  • Democracy/democratization
  • Domestic politics
  • Foreign aid
  • Political economy
  • Networks/NGOs