Foreign Aid Keeps Autocrats in Power

Wednesday, January 13th, 2010

External aid often promotes longevity in office for autocratic leaders who are otherwise at risk of being deposed, Bruce Bueno de Mesquita explains, because it helps them patronize their core group of supporters:

In such cases, aid not only fails to promote economic growth, but it also diminishes the odds that the political system will evolve in a more inclusive, democratic and growth-oriented direction.

This may seem too large a claim to some observers. After all, external aid generally comprises only a small component of a nation’s total economy. Since 1975, for instance, international aid has averaged only about $7 or $8 per citizen. Such numbers imply that foreign assistance is not significant enough to reshape economic prospects and barely enough to provide relief to the world’s poorest people. This assumption, however, misses the fundamental benefit that aid provides to autocratic leaders, and again, the data illustrate it. Autocrats in countries with below-average growth rates who do not get aid have a 25 percent chance of staying in office for five years. If they receive economic assistance, that survival time rises to seven years, a 40 percent increase. A few dollars of aid per capita is small in terms of any impact on the national economy, but it is huge with respect to helping autocrats enrich their small coterie of supporters.

On average, every dollar of per capita foreign aid improves an incumbent autocrat’s chance of surviving in office another year by about 4 percent (even after taking into account the independent effects on political survival exerted by such factors as the country’s economic growth rate, black market exchange rate premium, national debt, and its geographic situation). Since the average autocracy gets about $8 per capita in aid, foreign assistance may boost the survival prospects of poorly performing leaders by 30 percent or more.

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