Foreign aid and statehood in Africa

These two trends -- mounting foreign aid and static or diminishing state performance -- raise an obvious question: Is aid dependency contributing to misrule and state failure in Africa? Many critics argue that the two phenomena are related. To the contrary, the present analysis shows no negative association between aid receipts, democracy, and several measures of public good provision. Rather, the evidence is consistent with a positive or neutral relationship between aid and governance. Since the international community seems bent on reducing foreign aid, an important issue is whether African states can maintain and improve their performance with less foreign assistance. They may need continued subsidies to function at even a modest level. (Author abstract, modified)