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Press release: New study shows democracy aid works

(STOCKHOLM, Sweden and HELSINKI, Finland) - The research behind the report, Effects of Swedish and international democracy aid, was carried out by researchers from the United Nations University World Institute for Development Economics Research (UNU-WIDER). It finds that democracy aid has a positive effect on supporting democratization processes in aid-receiving countries. However, the domestic political environment within those countries affects how effective aid ultimately can be — the degree of state fragility and the presence of ethnic tensions, for example, also influence the outcome. Contrary to common critique of foreign aid in general, the researchers found no evidence of aid having a negative impact on democratic governance.

Other highlights from the report include:

• The contribution of democracy aid to democracy is relatively modest, but positive and statistically significant. The small, yet positive, effects reflect the likely limited reach of democracy aid in authoritarian states and developing democracies.
• The effects on democracy are stronger for aid that specifically targets the core building blocks of democracy — such as civil society, free and fair elections, media freedom and human rights.
• Democracy aid is more effective when it comes to supporting democratization rather than at preventing democratic backsliding. 
• Donor characteristics influence the effectiveness of aid; both bilateral and multilateral aid are effective at supporting democracy.
• The modality of aid — whether budget support, project aid interventions, core contributions, pooled programmes and funds, or technical assistance — appears to matter for the effectiveness of aid.

‘This is the most comprehensive study of its kind to date, and impressive. The importance of the finding that democracy aid targeted to core institutions is the most effective cannot be overstated in this context’, says Staffan I Lindberg, member of the Expert Group for Aid Studies and professor at V-dem Institute, who chaired the report’s reference group.

‘Global democracy is in decline. The international community should take note and act. Our research shows that democracy aid is among the core tools for policy makers. Cutting democracy aid poses risks in terms of democratic backsliding’, says Miguel Niño-Zarazúa, a Non-Resident Senior Research Fellow at UNU-WIDER, the lead author of the report.

The report Effects of Swedish and international democracy aid covers 148 countries over 1995–2018. It will be published on 9 December 2020 and can be downloaded here. 

Report launch and a webinar where the results are presented and discussed takes place on 10 December 2020 at 10:00-11:30 (Stockholm time, UTC+1). Register for the webinar or watch the live streaming here.

The Expert Group for Aid Studies is a Swedish governmental committee that independently analyses and evaluates Sweden’s international development assistance.

United Nations University World Institute for Development Economics Research (UNU-WIDER) provides economic and policy analysis with the aim of promoting sustainable and equitable development for all.