Foreign Aid: a Tool to Escape the Conflict Trap?


May 2023


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In developing countries of the Global South, civil conflicts pose a significant hindrance to the process of development. The risk of a civil conflict recurring in these countries within ten years after the end of a conflict is high, creating a conflict trap that perpetuates economic underdevel- opment. This study investigates the relationship between the likelihood of a conflict recurrence and the level of foreign aid. The findings suggest that higher levels of foreign aid after the end of a conflict are positively associated with the likelihood of a conflict recurrence. However, higher foreign aid in a given year is associated with a lower likelihood of a conflict recurrence in the following year. The decomposition of foreign aid data by foreign aid donor shows that this rela- tionship only applies to foreign aid from multilateral organizations such as the World Bank and the IMF. While there are indications that a country’s level of democratization may influence the relationship between foreign aid and conflict recurrence, there is no evidence to suggest that the human rights situation has any influence on this relationship.



Political Science, International Law and Relations