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Dissertation/Thesis Abstract

Politics, Trade and Foreign Aid
by Alam, Nabeela, Ph.D., Brandeis University, International Business School, 2012, 200; 3721587
Abstract (Summary)

This dissertation examines the influence of donor-driven and recipient-driven interests on foreign aid allocation.

Chapter 1 examines how the donor's trade interests together with elections and the political competitiveness of electoral processes in recipient countries are associated with bilateral foreign aid flows. US gives more aid to its non-competitive larger trade partners, but cuts their aid ahead of elections. It substitutes aid with market access for non-competitive countries for which it is an important export market, but not during election years. Germany, Japan and UK give more aid to countries with competitive electoral systems, but for these countries Japan and UK substitute aid with trade. The substitution disappears for UK during election years. Japan and UK also reward countries for which they are important export markets with more aid, but only during non-election years for Japan. During election years, Germany cuts aid to non-competitive countries, but gives more aid to non-competitive countries for which it is an export destination. There is weak evidence that France substitutes aid with market access for politically competitive countries.

Chapter 2 focuses on recipient incentives. I extend the Grossman and Helpman (1996) model of elections and special interests by adding foreign aid. I show that with conditional aid when the preferred policy of the donor and that of the special interest group are not aligned, the latter has an incentive to alter election probabilities so that the opposition party wins and implements the lobby's preferred policy. Under these circumstances, the government has an incentive to substitute away from conditional foreign aid. Furthermore, if the government has a higher probability of winning under unconditional aid, the lobby succeeds in asking the government to deviate the most in its policy stance.

In Chapter 3 I examine how China's growing importance as an export destination is related to countries' UN voting alignment with the US, and whether this relationship is different if the countries export oil and mineral resources that China. I find regional differences in UN voting alignment response. Latin American countries and Sub-Saharan African countries not heavily reliant on exports of oil and minerals show decreased political alignment with increased export dependence on China. UN voting alignment for the resource exporters from Sub-Saharan Africa do not vary with export dependence on China. Instead, they have a lower level of UN alignment with the US.

Indexing (document details)
Advisor: Mann, Catherine L., Erbil, Can
Commitee: Graddy, Kathryn, Menon, Nidhya
School: Brandeis University, International Business School
Department: International Economics
School Location: United States -- Massachusetts
Source: DAI-A 77/01(E), Dissertation Abstracts International
Subjects: African American Studies, Asian Studies, European Studies, Economics, Latin American Studies, International Relations, Political science
Keywords: Bilateral trade, China, Elections, Export dependence, Foreign aid, Un voting
Publication Number: 3721587
ISBN: 978-1-339-03225-2
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