Why Foreign Aid May be More Effective at Promoting Economic Growth in Less Democratic Countries.

The article explores the relationship between economic growth and foreign aid conditioned on the level of democracy in the potential recipient country. It explains why foreign aid should be less effective in more democratic recipient countries on the basis of the argument that aid primarily improves growth by incentivizing economic reform. The statistical results show that while foreign aid is positively correlated with economic growth, this positive relationship between aid and growth weakens in more democratic recipient countries.