The effectiveness of democratic aid and education aid.
详细信息
文摘
This paper contributes to the discussion of aid effectiveness by investigating the effectiveness of sector-specific foreign aid on democracy and education. Specifically, this paper attempts to answer two questions: whether democratic aid truly helps the prospect of democratization in aid-receiving countries, and whether education aid improves the recipients' level of education. Since democratic aid and education aid may take longer time to realize the effect, this paper utilizes a dynamic panel model proposed by Acemoglu, Johnson, Robinson, and Yared (2005, 2008) to answer the above questions. Furthermore, to address potential reverse causality, as well as omitted variable issues, the model will include fixed-effect model and instrumental variables. This paper finds that democratic aid slightly promotes democracy level and media freedom when fixed effects are removed. However, the effectiveness of democratic aid is not robust to either alternative scaling of aid, inclusion of control variables, or inclusion of instrumental variables. This paper also finds that education aid is relatively ineffective in promoting average years of schooling, primary completion rate, and pupil-teacher ratio five years after.