Do Countries Use Foreign Aid to Buy Geopolitical Influence? Evidence from Donor Campaigns for Temporary UN Security Council Seats

Bernhard Reinsberg

doi:10.17645/pag.v7i2.1837

Abstract

In recent years, donor countries have increasingly used different aid allocation channels to boost aid effectiveness. One delivery channel that has grown tremendously is ‘multi-bi aid’—contributions to multilateral organizations earmarked for specific development purposes. This article examines whether donors use multi-bi aid to further their selfish goals—specifically, to garner political support for their ambition to become a temporary member of the UN Security Council. In this context, multi-bi aid is particularly beneficial to countries with limited experience as foreign aid donors; whose governance quality is weak; and which are more internationalized. Using a sample of OECD/DAC donor countries in 1995–2016, time-series cross-section analysis corroborates these arguments. The analysis draws on a new dataset of media reports proxying for donor interest in winning a temporary seat in the UN Security Council and extended data on multi-bi aid flows. The findings demonstrate that multi-bi aid may be a tool for geopolitical influence, with yet unexplored consequences for aid effectiveness.

Highlights

A growing body of work demonstrates that donor motivations matter for aid effectiveness (Dreher & Kilby, 2010; Dreher, Klasen, Vreeland, & Werker, 2013; Headey, 2008)
Multibi aid—donor contributions to multilateral organizations earmarked for specific purposes—has emerged as a ‘third way’ of allocating foreign aid beside traditional channels (Reinsberg, 2017; Reinsberg, Michaelowa, & Eichenauer, 2015; Reinsberg, Michaelowa, & Knack, 2017)
I examine the unconditional relationship between United Nations Security Council (UNSC) campaigning and aid growth graphically

Summary

Introduction

A growing body of work demonstrates that donor motivations matter for aid effectiveness (Dreher & Kilby, 2010; Dreher, Klasen, Vreeland, & Werker, 2013; Headey, 2008). Multibi aid—donor contributions to multilateral organizations earmarked for specific purposes—has emerged as a ‘third way’ of allocating foreign aid beside traditional channels (Reinsberg, 2017; Reinsberg, Michaelowa, & Eichenauer, 2015; Reinsberg, Michaelowa, & Knack, 2017). Inferring donor motivations is difficult for multibi aid because it combines motivational elements of both traditional modalities—the quest for control and the preference for cooperation. The motivations underlying multi-bi aid likely depend on additional circumstances. Multi-bi aid is purely developmental as donors use it to push multilaterals toward interventions yielding tangible results and efficiency-enhancing reforms (Reinsberg, 2017; Reinsberg et al, 2015; Sridhar & Woods, 2013). In other cases—which are relatively underappreciated in the current literature—multi-bi aid may further the foreign policy goals of the donors

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Conclusion