Amplifying and nullifying the impact of democratic sanctions through aid to civil society

Abstract

ABSTRACT Both foreign aid and sanctions are foreign policy tools to promote democracy. Yet, it is unclear how far incentives and coercion enhance democratization. Since sanctions and aid are often employed at the same time, the goal of this study is to determine their joint effect on democratization in target/recipient countries. We argue that sending democracy aid through civil society organizations enhances the effectiveness of sanctions as a democracy promotion tool because the civil society is empowered to introduce democratic changes. Thus, in addition to the top-down pressure on the target government created by sanctions, there is a bottom-up pressure exerted by the civil society. Our empirical results show that democratic sanctions by the European Union and the United States are more likely to have a positive effect when aid flows bypass the government. Conversely, aid channeled through the public sector mitigates the generally positive effect of sanctions on democracy. In order to estimate these joint effects, we employ a new comprehensive dataset on economic sanctions: the EUSANCT Dataset which integrates and updates existing databases on sanctions for the period between 1989 and 2015, merged with disaggregated OECD aid data and V-Dem democracy scores.