Scandinavian Working Papers in Economics
SITE Working Paper Series,
Stockholm School of Economics, Stockholm Institute of Transition Economics
No 25: Aid Effectiveness in Times of Political Change: Lessons from the Post-Communist Transition
Anders Olofsgård (), Maria Perrotta () and Emmanuel Frot ()
Additional contact information
Anders Olofsgård: Stockholm Institute of Transition Economics, Postal: Stockholm Institute of Transition Economics, Stockholm School of Economics, P.O. Box 6501, SE-113 83 Stockholm, Sweden
Maria Perrotta: Stockholm Institute of Transition Economics, Postal: Stockholm Institute of Transition Economics, Stockholm School of Economics, P.O. Box 6501, SE-113 83 Stockholm, Sweden
Emmanuel Frot: Microeconomix, Postal: Stockholm Institute of Transition Economics, Stockholm School of Economics, P.O. Box 6501, SE-113 83 Stockholm, Sweden
Abstract: We argue that the tilt towards donor interests over recipient needs in aid allocation and practices may be particularly strong in new partnerships. Using the natural experiment of Eastern transition we find that commercial and strategic concerns influenced both aid flows and entry in the first half of the 1990s, but much less so later on. We also find that fractionalization increased and that early aid to the region was particularly volatile, unpredictable and tied. Our results may explain why aid to Iraq and Afghanistan has had little development impact and serve as warning for Burma and Arab Spring regimes.
Keywords: foreign aid; development
34 pages, October 22, 2013
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