Expert Commentary

Foreign aid, democratization and civil conflict: What are the effects of democracy aid?

2011 study in the American Journal of Political Science on the relationship between democratizing aid, transitioning countries and civil conflict.

Democracy has long been promoted by many international organizations as the form of government that best secures individual rights and provides a more stable society. However, some studies have suggested that the process of democratization leaves states vulnerable to domestic political violence. This does not occur in all budding democracies, however; foreign aid programs that help build democracy may buffer some of these newly forming governments from internal strife.

A 2011 study by researchers at the University of Pittsburgh, “Foreign Aid, Democratization and Civil Conflict: How Does Democracy Aid Affect Civil Conflict?” uses data on democracy aid, country characteristics, level of democratization and conflict initiation from 1990 to 2003. The study, published in the American Journal of Political Science, notes that this aid has become an increasingly important policy instrument: “While only 30 countries received OECD democracy aid in 1990, this number increased to 76 in 1995, and 134 countries received democracy aid in 2003.”

The study’s findings include:

  • Overall, “democratizing states, on average, face a higher risk of civil conflict than nontransitioning states.” This finding supports previous scholarship on the issue.
  • Countries that receive higher levels of aid during democratization are “less likely to experience conflict than those that receive less aid”; the conflict-dampening effect of every dollar of aid per thousand citizens is approximately 4%.
  • The risk of violent conflict for countries at or above the 40th percentile in terms of aid received is similar to that of nondemocratizing countries. In other words, the likelihood a democratizing country will experience discord during the transition period declines once a certain level of aid is reached.
  • The lack of such aid can have serious effects for countries in transition: “Democratizing states which do not receive democratization aid are over four times more likely to experience civil wars than nonaid recipients.”
  • Between 1990 and 1997, more than 56% of the U.S. National Endowment for Democracy grant disbursements were awarded not to governments, but to civic and labor organizations around the globe. This is important because “democracy assistance programs can increase the watchdog capabilities of civil society organizations and NGOs by providing technical and financial assistance. Democracy aid given to civil society organizations can also empower moderate ‘prodemocracy’ actors.”

The researchers conclude that while “the common argument against the effectiveness of aid is that aid reduces the government’s accountability,” funds specifically targeted for democratization have different effects. “Although most of the development aid goes to the governments of the recipient countries,” the authors note, “democracy assistance aid is usually disbursed to a variety of sectors in the recipient country.”

Related studies have also looked at the consequences of withdrawing aid, or foreign aid “shocks,” as well as how ethnic fractionalization hinders the effectiveness of aid.

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