Foreign aid, FDI and the personalization of power in autocracies

2025/03/21 by Bernat Puertas, Abel Escribà‐Folch · 2 voices · 1 citation
Social Sciences · #International Development and Aid #Political Conflict and Governance #Religion, Society, and Development

paper · pdf · doi:10.1017/psrm.2025.9

openalex created_date 2025/03/21 · openalex publication_date 2025/03/21 · openalex updated_date 2026/07/25

Abstract

Abstract This article examines the relationship between foreign aid and foreign direct investment (FDI) and the degree of personalism in dictatorships. We contend that aid leads to higher personalism since it is a windfall that accrues to the government and does not require cooperation from elites to obtain it. Contrarily, we posit that FDI is linked to lower levels of personalism because it reshapes elites’ incentives and influence as they may acquire new preferences, connections, and exit options, thus constraining dictators. Using data on Official Development Assistance (ODA) and FDI, and a latent index of personalism in autocracies, we find no robust evidence that ODA or FDI are correlated with personalism, but have some effect on some of the index’s components.

Citations

• Do Authoritarian Institutions Constrain? How Legislatures Affect Economic Growth and Investment
• Economic Policy, Institutions, and Capital Flows: Portfolio and Direct Investment Flows in Developing Countries
• Oil and Autocratic Regime Survival
• Does Oil Hinder Democracy?
• Coup-Proofing in the Shadow of Intervention: Alliances, Moral Hazard, and Violence in Authoritarian Regimes
• Personalization of Power and Mass Uprisings in Dictatorships
• The Rush to Personalize: Power Concentration after Failed Coups in Dictatorships

Cited by

• The onset of civil armed conflicts and personalization of power in dictatorships

Discussions

• New Publication Alert! @bernatpuertas.bsky.social l & A. Escribà-Folch propose opposing theories of the effects of foreign aid and FDI on personalization of power in autocracies and find that neither [bsky, 2 points, 0 comments]
• 8️⃣Further steps? Investigating sectoral FDI (primary vs. secondary vs. tertiary sectors) and forms of aid (economic vs. democracy aid) could shed light on how personalism might respond to distinct ty [bsky, 0 points, 0 comments]

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