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Working Papers
We model how the size of a
leader’s support coalition and government revenues affect trades between policy
concessions and aid. We find that aid benefits donor and recipient leaders,
while harming the recipient’s, but not the donor’s, citizenry. The willingness
to grant policy concessions for aid depends on how easily leaders can reimburse
supporters for their concession. As coalition size increases, incumbents rely
more on public goods to reward supporters, making it difficult to compensate
for policy concessions. Small coalition leaders rely more on private goods to
retain office, making it easier for them to grant policy concessions for aid.
Empirical tests of bilateral aid transfers by OECD nations between 1960 and
2001 support the predictions that 1) aid is given by wealthy, large coalition
systems; 2) relatively poor, small coalition systems are most likely to get
aid; but, 3) conditional on receiving aid, the amount increases as the
recipients coalition size, wealth and policy salience increase. Evidence suggests
that OECD members have little humanitarian motivation for aid giving.
Incumbent
political leaders risk deposition by challengers within the existing political
rules and by revolutionary threats. Building on Bueno de Mesquita et al’s
(2003) selectorate theory, the model here examines the policy responses of office
seeking leaders to revolutionary threats. Whether leaders suppress public goods
such as freedom of assembly and freedom of information to hinder the
organizational ability of potential revolutionaries or appease potential
revolutionaries by increasing the provision of public goods depends, in part,
upon the sources of government revenues. Empirical tests show that governments
with access to revenue sources that require few labor inputs by the citizens,
such as natural resource rents or foreign aid, reduce the provision of public
goods and increase the odds of increased authoritarianism in the face of
revolutionary pressures. In contrast, without these sources of unearned
revenues governments respond to revolutionary pressures by increasing the
provision of public goods and democratizing.
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