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Author Kangoye, Thierry
Source Hyper Articles en Ligne (HAL)
Content type Text
File Format PDF
Language English
Subject Keyword democracy ♦ foreign aid ♦ terms of trade instability ♦ shs ♦ Humanities and Social Sciences/Economies and finances
Abstract In this paper, we examine the effects of a major source of instability, namely terms of trade instability on the quality of democracy, and we investigate whether foreign aid can dampen them. We take advantage of previous empirical findings explaining the role of aid in mitigating the adverse effects of external shocks, and argue that in the long term, aggregate aid flows can potentially dampen the effects of terms of trade instability on democracy. An empirical investigation with data from 71 developing countries over the period 1980-2003 provides supportive results. Moreover, the data suggest that terms of trade instability affects democracy through income instability.
Educational Use Research
Learning Resource Type Article