This is NOT the Nobel Symposium panel with Jeff Sachs and others, for which the video isn't available yet. It IS a 3-minute clip of a talk Bill gave at the Swedish think tank Timbro while he was in Stockholm. [vimeo https://vimeo.com/78370826]
Does foreign aid encourage democracy in recipient countries, or does it strengthen their dictators instead? These have long been the contradictory predictions of two competing hypotheses in the aid debate, but a new DRI working paper by Nabamita Dutta, Peter T. Leeson and DRI Postdoctoral Fellow Claudia Williamson suggests that in reality neither prediction captures the entire picture:
This paper offers a third hypothesis about how aid affects recipients’ political institutions that we call the “amplification effect.” We argue that foreign aid has neither the power to make dictatorships more democratic nor to make democracies more dictatorial. It only amplifies recipients’ existing political institutions. We investigate this hypothesis using panel data for 124 countries between 1960 and 2009. Our findings support the amplification effect. Aid strengthens democracy in already democratic countries and dictatorship in already dictatorial regimes. It doesn’t alter the trajectory of recipients’ political institutions.
The amplification effect of aid means, the authors suggest, that both competing hypotheses ascribe too much power to foreign assistance. Aid doesn't alter the institutional trajectory of any country; it makes democracies more democratic, and autocracies more dictatorial. So aid given for the "purposes of democratizing the dictatorial developing world may not only fail," they write, "but may actually cause harm."
What could this mean for the real purpose of aid -- economic growth and development?
To the extent that because of their stronger constraints on executive power, democracies tend to pursue better economic policies than dictatorships, when democracies receive foreign aid they become more democratic, leading to the adoption of better policies, which in turn leads to higher economic growth. Conversely, when dictatorships receive aid they become more dictatorial, preventing the adoption of better policies, which in turn prevents increases in economic growth.
By William Easterly This is a sampling of actual posts on Twitter that I requested (@bill_easterly) last weekend for “decodings of aid/development jargon” . Inspiration was from 40 Publishing Buzzwords, Clichés and Euphemisms Decoded. I don’t necessarily endorse any implied viewpoint, if any.
“beneficiaries” : the people who make it possible for us to be paid by other people @monanicoara
“bottom-up” : don’t ask someone what might work, just make something up instead @thejoeturner
“baseline” : a point which is so low that positive results are the only possible outcome @ANLevine
“accountability for results”: we keep all our promises by issuing new promises @bill_easterly
“bottoms-up development”: downing single-malt whiskey in one shot at Davos @Arvind11d123
“civil society involvement”: consulting the middle class employee of aUS or European NGO @dangay
“community capacity building” : teach them what they already know @fauvevivre
“demand-driven approach”: you create the demand and then you respond to it
“empowerment” : what is left when all the quantifiable variables give non significant results @MarianaSarastiM
“entrepreneurial” : vaguely innovative and cool, but definitely nothing to do with the hated “market” @jselanikio
“experienced aid practitioner” : has large number of air miles in account @thejoeturner
“expert” : I read a book about the place on the plane @savo_heleta
“field experience” : I can’t bear DC anymore @MarianaSarastiM
“gender” : counting how many women attend your meeting @liamswiss
“Global North” : White academics; “Global South” : Indian academics @Isla_Misty
“innovation” : we’re sexy, you want to be associated with us @DarajaTz
“leverage” : we’re not paying for all of this @katelmax
“low overhead” : volunteers run headquarters @thejoeturner
“low-hanging fruit”: we were already going to achieve this anyway @Global_ErinH
“mainstreaming” : forgetting @swampcottage
“microfinance” : not as good as sub-prime lending @lippytak
“meetings” : our grant said we had to host an event @Global_ErinH
“per diem”: what we have to pay local officials to attend our meetings @Afrophile
“participatory stakeholders” : people who should solve their own problems @UCGHR
“participation” : the right to agree with preconceived projects or programs @edwardrcarr
“partnering with other institutions” : we’re raising barriers to entry @JustinWolfers
“political will” : I have no comprehension of the incentives faced by the people who I wish would do stuff I want @m_clem
“practical solutions” : photogenic solutions @thejoeturner
“pro-poor” : the rich know best @james_tooley
“RCT” : research method yielding same results as qualitative work at 10 times the cost –@texasinafrica
“rent-seaking behavior” : everything not nailed to the floor will be stolen- @charcoalproject
“outreach” : intrude @langtry_girl
“ownership” : we held a workshop @dangay
“raise awareness” : no measurable outcome @jonathan_welle
“scale-up” : It’s time for follow on grant @HunterHustus
“sensitize” : tell people what to do @zw1tscher
“sustainable” : will last at least as long as the funding @thejoeturner
“tackling root causes of poverty” : repackaging what we’ve already done in a slightly more sexy font @thejoeturner
“UN Goals”: making up targets for problems we don’t understand paid for with money we don’t have @jacobhorner
Notes: I have done some very minor editing for spelling and clarity.