Can Repressive Regimes Be Moderated through Foreign Aid?

• Published in: Public choice Vol. 77; no. 3; pp. 535 - 550
• Main Author: Palda, Filip
• Format: Journal Article
• Language: English
• Published: Leiden Kluwer Academic Publishers 01-11-1993; Springer Nature B.V
• Subjects: ACCESS TO GOODS AND SERVICES; Carrots; Cash; Developing countries; Developing Nations; Dictators; Dictatorship; Economic growth; Foreign Aid; Gifts; Income distribution; Income effect; Infrastructure; LDCs; Monetary Policy; National income; Oppression; POLITICAL SYSTEM AS A WHOLE; Politics; REGIMES; REPRESSION; Substitution effect; Wealth
• ISSN: 0048-5829; 1573-7101
• DOI: 10.1007/BF01047859

In what circumstances should foreign aid be given to less developed countries with repressive rulers? Repressive rulers are assumed to control the national income and to trade it against the probability of staying in office which is assumed in turn to depend positively on popular wealth and repression. A foreign donor aware of this process of optimization will pursue his international objectives by attaching conditions to his aid that alter the relative price of repression and popular wealth in the calculations of the tyrant. The effectiveness of direct and in-kind aid and the desirability of a "carrot an stick" aid policy depend on the direct and the interactive effects that popular wealth, repression, and the parameters of economic growth exert on the regime's stability and its level of income.