Distributing dollars for democracy: changing foreign policy contexts and the shifting determinants of US democracy aid, 1975–2010
In the late 20th century, the United States adapted to changes in the international arena and initiated innovative strategies of democracy promotion by providing assistance to governments, political parties, and non-governmental organisations all over the world. Through the lens of foreign policy change, this analysis examines the factors shaping US democracy aid decisions in the context of two major paradigm shifts—the end of the Cold War (1989) and the 9/11 episode (2001)—which establish three distinct US foreign policy contexts: Cold War, post-Cold War, and Global War on Terror. Examining democracy aid allocations; ideational goals; US interests; and economic, political and social factors, we argue that the external foreign policy context of each time period generates a different blend of determinants that shape democracy aid allocations, with ideational factors more consequential in the post-Cold War and Global War on Terror contexts, and interest-based factors more significant in the Cold War and Global War on Terror contexts. Evidence from the period between 1975 and 2010 provides support for our argument. We conclude with a discussion of the implications of these findings.
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Article 18 September 2015
Democracy and Foreign Policy: A Retrospective
Chapter © 2023
Can Foreign Aid Promote Political and Economic Freedom?
Chapter © 2019
Notes
See www.usaid.gov/our_work/democracy_and_governance. USAID revised its description of democracy aid during the Obama Administration, but this analysis reflects USAID approaches during the period of study. Democracy aid is distinct from development and military aid and does not include conditioning aid on democratic or human rights reform.
There are good reasons to expect that the relative importance of democracy aid determinants is contingent on external foreign policy context (e.g. Bearce and Tirone 2010; Meernik et al. 1998). Thus, incorporating foreign policy context should improve explanation and understanding of aid allocations over more common approaches that do not make such distinctions (e.g. Alesina and Dollar 2000; Apodaca and Stohl 1999; Fariss 2010; Heinrich 2013; Palmer et al. 2002) or simply introduce context (e.g. ‘Cold War years’) as a control variable for the dependent variable (e.g. Bueno de Mesquita and Smith 2007; Drury et al. 2005).
We focus on democracy aid to the developing world and exclude developed countries in Asia, Western Europe and North America; the former Soviet Union and Eastern European countries; and countries with limited populations and/or available data that do not appear in the Polity dataset.
For this value, we calculate log (aid value +1) to adjust for non-recipients (zero values for aid). In practice, this effectively results in a range from 0 to 21.5 for the logged democracy aid variable.
For this measure, Bell et al. (2010: 11) explain: ‘we determine the absolute minimum distance between each state in the system and the nearest: (1) US rival, (2) Marxist state, (3) leftist rebellion, or (4) US-involved conflict. This distance […] serves as our proxy for the strategic security importance of the state. […] [In S]tates that are close to any of these strategic security concerns, security salience will be higher’. We use the logged value of this variable—log (strategic salience + 1)—which effectively generates a 0–9 scale.
According to Marshall (2016), major episodes of political violence involve at least 500 directly related fatalities and reach a level of intensity in which political violence is both systematic and sustained (a base rate of 100 directly related deaths per annum). Episodes include all international, civil, ethnic, communal, and genocidal violence and warfare.
For this value, we calculate log (aid value + 1) to adjust for non-recipients (zero values for aid). In practice, this effectively results in a range 0–23 for the logged other aid variable.
Results from maximum likelihood and two-step Heckman models were consistent, so we report only the latter.
We use this variable because development level is a factor determining aid eligibility rather than allocation levels/amounts (e.g. Apodoca and Stohl 1999). Because of differences between democracy aid and development aid, we expect recipient economic need to be a more general factor for democracy aid allocations.
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Acknowledgements
The authors would like to thank Sarah Bush, Brandy Jolliff Scott, and the anonymous reviewers for their comments and suggestions.