Does Aid Buy Votes?

27 Pages Posted: 5 Feb 2012

See all articles by Paolo Pinotti

Paolo Pinotti

Bocconi University - BAFFI Center on International Markets, Money, and Regulation

Riccardo Settimo

Bank of Italy

Date Written: July 12, 2011

Abstract

We use data for 143 developing countries during the period 1980-2004 to study empirically the relationship between multilateral aid (as proxied by IDA flows) and support for US foreign policy, as measured by voting alignment at the United Nations General Assembly. Our identification strategy exploits exogenous variations in international commodity prices and natural disasters to address causality from aid to voting. Our results suggest that, even though multilateral and bilateral aid flows are both associated with greater voting alignment, the causal effect of multilateral aid is not significantly different from zero. This result is robust to controlling for other determinants of voting patterns, for unobserved heterogeneity at the country level and for common time trends.

Keywords: foreign aid, UN Assembly, voting, international financial institutions

JEL Classification: F35, O10

Suggested Citation

Pinotti, Paolo and Settimo, Riccardo, Does Aid Buy Votes? (July 12, 2011). Bank of Italy Occasional Paper No. 101, Available at SSRN: https://ssrn.com/abstract=1998754 or http://dx.doi.org/10.2139/ssrn.1998754

Paolo Pinotti

Bocconi University - BAFFI Center on International Markets, Money, and Regulation ( email )

Milano, 20136
Italy

Riccardo Settimo (Contact Author)

Bank of Italy ( email )

Via Nazionale 91
Rome, 00184
Italy

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