On the persistence of the democracy deficit in the MENA region : the role of development aid -

Abstract

The literature on the impact of foreign aid flows on the quality of political institutions and the democratization process has increased in the last decade. In this paper, we attempt to measure the effect of aid directed towards developmental objectives on the democratization process in the MENA region. Using a panel data of 22 MENA countries between 1970 and 2014 we utilize a Two-Stage Least Squares method to estimate this effect. We find that aid flows are associated with a small but significant deterioration in institutional quality and hence in the democratization process.