Does Aid Effectiveness Differ per Political Ideologies?

ABSTRACT

Despite the extensive empirical literature on aid effectiveness, existing studies have not addressed directly how political ideology affects the use of foreign aid in the recipient country. This study, therefore, uses a unique dataset of 12 democratic countries in Africa to investigate the impact of political ideologies on aid effectiveness. Our results indicate that each political party uses aid differently in peruse of their political, ideological orientation. Further analyses suggest that rightist capitalist parties are likely to use aid to improve the private sector environment. Leftist socialist on the other hand, use aid effectively on pro-poor projects such as short-term poverty reduction, mass education and health services. Our additional analysis on the lines of colonialisation shows that the difference in the use of aid by political parties is much stronger in French colonies than Britain colonies. The study provides insight on how the recipient government are likely to use foreign aid.

KEYWORDS:

• Africa
• democracy
• foreign aid
• political ideology

Disclosure statement

No potential conflict of interest was reported by the authors.

Notes

1 (In Australia, Liberal party – right wing; vs. Labour party – left wing. In USA, Republican – right wing vs. Democratic – left wing; UK; Conservative Party – right wing vs. Democratic party – left wing).

2 The OECD also notes the following exclusions in its aid definition: ‘Grants, loans and credits for military purposes are excluded. Transfer payments to private individuals (e.g., pensions, reparations or insurance payouts) are in general not counted’.

3 Alvi and Senbeta argue that, squaring the shortfall in the poverty severity index gives more weight to the very poor, magnifying the state of the poorest of the poor.

4 There are extensive studies on donor-recipient ideology Tingley (2010), Fleck and Kilby (2006), Milner and Tingley (2010), hence we do not investigate such relationship.

Additional information

Notes on contributors

Vincent Konadu Tawiah

Vincent Konadu Tawiah is a final year PhD candidate at Griffith University, Australia. He attained his master's qualification from University of Mysore, India and holds professional qualification in accounting, finance and economics. His research interest cut across accounting, corporate governance economics and politics. He has publications in top-ranked journals across his research area.

Evans John Barnes

Evans John Barnes is a Data insight professional with Ecom Ghana Group of companies. He completed his Masters of Arts in Economics at the University of Mysore in India. His research interest is in development economics, climate change and sustainable and agricultural economics. Barnes has published in leading international journals.

Abdulrasheed Zakari

Abdulrasheed Zakari has M.sc Economics from Usmanu Danfodiyo University Sokoto Nigeria. Since then he has been active in research, and he has authored and co-authored four quality articles on peer review international journal with numerous papers under review. He has provided many scholarly services in terms of reviewing the article from Environmental Science and Pollution Research Journal. In addition, he has taken consultancy service with numerous NGOs, among others. His research interest is in environmental and development economics.