Foreign Aid Allocation and Regime Stability: A Cross-National Study in Indonesia

Abstract

Purpose: The aim of the study was to analyze the foreign aid allocation and regime stability: a cross-national study in Indonesia. Methodology: This study adopted a desk methodology. A desk study research design is commonly known as secondary data collection. This is basically collecting data from existing resources preferably because of its low cost advantage as compared to a field research. Our current study looked into already published studies and reports as the data was easily accessed through online journals and libraries. Findings: The study in Indonesia revealed that foreign aid allocation plays a crucial role in regime stability. Increased foreign aid, especially directed towards economic development and infrastructure, positively impacted regime stability. Conversely, political conditionality attached to aid often led to destabilization, fostering domestic opposition and unrest. Unique Contribution to Theory, Practice and Policy: Dependency theory, principal-agent theory & institutional theory may be used to anchor future studies on foreign aid allocation and regime stability: a cross-national study in Indonesia. By pooling resources, sharing expertise, and aligning objectives, stakeholders can leverage synergies and address governance challenges more effectively. Donor countries should adopt more coherent and principled aid allocation policies that prioritize the promotion of democratic governance, human rights protections, and inclusive development.