Development Aid and the Democratic Process in the OSCE Region

Abstract

AbstractDespite a great deal of scholarly debate, the impact of traditional and emerging development aid on recipient countries is still under heavy academic scrutiny. Certain authors have highlighted how said financial support often leads to an increase in corruption and/or inequality, while others find no correlation whatsoever. In the same vein, the literature has also underlined how development aid provided by traditional donors has a higher chance of improving democratic openness than aid provided by emerging countries, which instead seems to be more effective in terms of economic development. Despite those relevant insights, the literature seems to have mostly set its focus on inquiries that explore the topic at either the global or the regional level. For those reasons, I opted to observe the above trends at the national level by analysing the impact of development aid in 15 OSCE recipient countries. In particular, I seek to either confirm or refute the literature’s notion that emerging countries’ contributions are expected to improve the recipients’ economies, although said achievements also come with higher corruption levels. At the same time, I also postulate that development aid coming from traditional donors is more likely to foster democratic progress. To fulfil both these goals, I rely on OECD and Aiddata data sets in order to track the aid flows from two traditional donors (the US and the EU) and two emerging providers (Russia and China) over the 2012–2019 period.