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Mario Eaaudi Center for International Studies Working Paper No.
28 pages Published: 3 Dec 2005
Center for global development
Cornell University; Center for Global Development
date written: January 2006
A number of proposals today support a significant increase in foreign subsidies to Subsahara Africa, although this region already receives a historically unprecedented aid. This essay examines the evidence for the potentially negative impact of the aid dependence of state institutions, a topic that has received relatively little attention. We notice several ways through which political institutions could be adversely affected and special attention is paid to fiscal and state sales problems. In addition to the review of economic literature on aid sales ratio, this principal brings the many years of political science literature to the state building in order to consider the potential impact of the aid dependence on the relationship between state and citizens. We conclude that states that may raise a significant proportion of their revenues from the international community are less charitable to their citizens and under low pressure to maintain popular legitimacy. They therefore have less likely that the incentives cultivate and invest in effective public institutions. As a result, significant increases in the initial influences on a sustained period could have a harmful effect on institutional development in Subsahara Africa.
Keywords: Institutions, Tools, State Buildings, Sub-Saharan Africa
Jelclassification: O10, P16, H20
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