Open AccessDOES FOREIGN AID PROMOTE DEMOCRATIC INSTITUTIONS IN POST-CONFLICT CAMBODIA? EVIDENCE FROM ARDL BOUNDS TESTING APPROACH
Author(s) -
Ly Slesman
Publication year - 2021
Publication title -
singapore economic review/the singapore economic review
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.275
H-Index - 17
eISSN - 1793-6837
pISSN - 0217-5908
DOI - 10.1142/s0217590821500429
Subject(s) - democratization , distributed lag , cointegration , structural break , democracy , corporate governance , economics , per capita , democratic governance , macroeconomics , development economics , political science , economic system , international economics , econometrics , politics , sociology , finance , population , demography , law
Whether foreign aid promotes or hinders democratic institutions has been debated with opposing views. This paper investigates short- and long-run effects of foreign aid on democratization in post-conflict Cambodia using autoregressive distributed lag bounds testing and Gregory–Hansen structural break testing approach for cointegration over 1980–2015 period. The findings reveal that net bilateral foreign aid per capita, aggregated and classified into purpose-based ‘governance aid’, ‘economic aid’, ‘other aid’ and ‘donor-specific aid’ from the US, EU, France, Australia and Japan, promote long-run democratization. In the short run, only governance and economic aid appear to have a consistent positive effect on democratization.