Foreign aid, democratization and autocratic survival

Does foreign aid prop up authoritarian regimes or is it conducive to democratic reforms? We use a two-level perspective that takes the domestic incentives of both the recipient and the donor into account to review the existent literature respecting this question. By bringing together research on democracy and autocracy with the literature on aid effectiveness and the political economy of aid provision, we provide a political economy perspective against which the mixed effects of foreign aid on political regimes can plausibly be explained. Against this background, research on aid effectiveness may give more attention to incentives in recipient countries and may take on a more comprehensive perspective on international relations. At the same time, the debate on authoritarianism may also gain insight into authoritarian strategies by investigating aid negotiations.