2010/07/12 by Gabriella R. Montinola · 77 citations
Computer Science · Social Sciences · #Aid effectiveness #Argument (complex analysis) #Conditionality #Democracy #Developing country #Development economics #Economic Growth and Development #Economic growth #Economics #International Development and Aid #Macroeconomics #Political science #Politics #Religion, Society, and Development #Work (physics)
paper · pdf · doi:10.1007/s12116-010-9068-6
published in Studies in Comparative International Development 45(3), 358-382 (Springer Science+Business Media)
openalex publication_date 2010/07/12 · openalex created_date 2025/10/10 · openalex updated_date 2026/08/01
Does aid conditionality—the setting of policy goals in exchange for access to aid—promote reform? Many studies on the impact of aid and reform suggest not. However, few explicitly examine whether the impact of aid on reform is mediated by recipient regime type. I argue that conditional aid is effective but its efficacy depends on recipient countries’ level of democracy because the value of aid to governments depends on the degree to which it helps them maintain power, and recent work shows that the marginal impact of aid on political survival increases with level of democracy. I test this argument on data from 68 countries over the period from 1980 to 1999. I focus on the impact of IMF and World Bank aid on fiscal reform, one of the most commonly stipulated conditions in aid-for-policy arrangements. I find that aid from the Bretton Woods institutions promotes fiscal reform, but only in more democratic countries.