Paper Title: Political Conditionality: An Assessment of the Impacts of EU Trade and Aid Policy

Transcription

1 Austin Mitchell PhD student Department of Political Science University at Buffalo SUNY 9/25/2012 Paper Title: Political Conditionality: An Assessment of the Impacts of EU Trade and Aid Policy Abstract: The 2000 Cotonou Agreement represents the European Union s (EU) policy of political conditionality for trade and aid with the African, Caribbean, and Pacific group of states (ACP). This conditionality requires ACP nations to focus on human rights, democracy, the rule of law, and good governance as a means of assuring sustainable development rather than exclusive economic development. Existing studies indicate that foreign aid, not only from the EU, often is linked politically while other studies cast doubt on the ability for aid to encourage growth in the conditional areas. However, some literature indicates EU trade relations may be beneficial to at least human rights. As a means of assessing the effectiveness of political conditionality, this research paper quantitatively analyzes the effectiveness of EU trade and aid in comparison with trade and aid from non-eu member nations. Additional considerations include the impact of EU integration policy as an incentive towards domestic improvements of candidate countries and also the effect of the recent euro crisis. Introduction In year 2000, nations from the European Union (EU) and the African, Caribbean, and Pacific group of states (ACP) formed an agreement which set conditions upon developmental assistance from the EU and EU member nations to the ACP nations. This agreement, the Cotonou Agreement, built upon other prior agreements with some ACP nations but represents the first time that political conditions were used in a formal development assistance agreement. Article 8.4 of the agreement details the four areas in which political dialogue shall occur: human rights, democratic principles, rule of law, and good governance (Partnership Agreement 2000). For this paper, these four areas are referred to as institutional development. This research paper assesses the extent to which the EU and EU member nations have 1) conditioned aid and trade based upon the four political areas and 2) how the ACP nations have improved in these four areas from EU trade and aid. 1 Aid While much work has been accomplished in theorization and empiricism for both aid and trade effects on development, these two areas differ greatly on their application to economic growth versus institutional development (such as by the four metrics). First, theories on trade and economic growth center on whether import competing or export oriented domestic economy provides better growth, though the latter has become widely held as being superior. Second, aid studies focus much more on institutional development but studies on economic growth tend to 1 An alternative analysis to this study finds that EU bilateral aid largely mimics EU multilateral aid. This discrepancy of findings will be presented at the conference and do not negate the findings in this paper.

2 discuss effectiveness without technical theories such as trade on economic growth. Third, though economy is different than human rights, democratic principles, rule of law, and good governance lessons may be applied to these areas from the economic growth literature. Many studies have shown that donor nations are often motivated by factors external to altruism. In their seminal work, Alesina and Dollar (2000) study patterns of aid giving by developed nations, finding that much foreign aid is politically based either for former colonial ties or by United Nations voting. They argue that these political patterns may be one reason that aid is ineffective at promoting growth. In a similar line of reasoning, Akram (2003) finds that aid does not typically flow to the lowest income nations which is an indication that donors are not concerned with improving welfare of the least developed nations. And this trend seems to be increasing with the increases of non-development Assistance Committee (DAC) donations (Dreher, Nunnenkamp, and Thiele 2011). Additionally, Younas (2008) suggests that aid is actually awarded based upon trade relationships in which donor nations provide aid to nations that import donor s goods. Other studies have assessed the basis for effectiveness of aid on economic or institutional growth. Burnside and Dollar (2004) explain the relationship of aid and growth to be determined by macroeconomic policies. They find that nations which implement certain policies which produce fiscal surpluses, inflation, and trade openness show economic growth correlated with aid. As for institutional growth, Svensson (2003) considers that aid is often ineffective at promoting growth despite agreements which are supposed to be based upon political conditionality. Svensson creates an alternative model for awarding aid which promotes competition to improve state practices. Svensson s model would allocate funds to groups of states, and shares of the allocation would be contingent upon improvements in specified criteria. Svensson s approach to aid may be useful and timely given the new regional dimensions of the Cotonou agreement since Alternatively, Neumayer (2003a) does find that need plays a role in the distribution of aid but he also finds that donors award a limited amount more of aid to nations that have better civil and political rights. In a separate study, Neumeyer (2003b) also finds that bilateral donors do not screen both civil/political rights as well as personal integrity rights of recipient nations when determining donations. However, though some evidence suggests that donors are concerned with human rights, such concerns may cause neglect for economic need (Younas 2008). Further, when governments in the United Nations Commission on Human Rights criticize the human rights practices of other nations, multilateral aid tends to decrease but bilateral aid does not change (Lebovic and Voeten 2009) which shows a lack of responsiveness by donor nations to human rights practices. Other studies investigate the relationship of aid on other institutional metrics. Research suggests that aid does not promote democracy (Knack 2004) but this leaves open the question as to whether democracy is awarded with aid. Schudel (2008) argues that nations do not account for corruption when awarding aid despite the negative consequences for aid effectiveness. He additionally argues that the level of corruption of donor nations is tied to the level of corruption of recipient nations. To sum the literature on aid, aid is often found to be awarded for purposes beyond recipient need or development. The literature on aid s effects to economic growth indicate that domestic policies are highly determinative of aid effectiveness, and this finding could perhaps be extrapolated to institutional development. Lastly, while some evidence shows that a few donor

3 nations account for human rights in aid decisions, both the effectiveness and conditionality of aid on the other institutional development metrics is questionable. Trade The relationship of trade on economic growth is largely omitted from this discussion but a brief review of trade and institutional development is discussed here. For international trade to flourish, domestic rule of law must be strengthened in trading nations (Petersmann 1998) especially developing economies. Because of the need for rule of law in order to establish foundations conducive to international trade, heightened trade may be a natural result of improvements in these areas rather than the implementation of any preferential trade agreement. Similarly, some democratic improvements may be highly correlated with specific macroeconomic policies which may enable greater trade flows and foreign direct investment (FDI). These policies may include an independent bank and fixed or pegged interest rates. For this reason perhaps not all increases in trade within the Cotonou may be due to implementation of conditionality. The effect of trade on institutional development is a different question (than development on trade). The idea that trade liberalization and preferential agreements could be used to promote human rights dates back to at least the 1980 s (Alston 1982), but the development of foreign trade may have negative consequences for human rights especially due to trade rules being international while human rights are typically domestic. Much of the interplay between trade and human rights are new phenomenona since the creation of the WTO, and there is much work to be done in order to resolve some of the tensions between these areas (Cottier 2002). However, Hafner-Burton (2005) studies preferential trade agreements across three decades, finding that agreements which specifically tie trade to human rights are effective at improving human rights practices within the contracting states but this improvement does not occur without political conditionality. While the above review of trade on development is quite brief, it does show a few areas of concern. Increases of trade may be dependent upon the macroeconomic policies and enforcement of developing nations because of simple risk calculation of investors rather than, or in conjunction with, preferential trade agreements. As for the effects of trade on institutional development, theory and evidence suggest a positive relationship but that it is not without conflict and potential negative consequences. Data This study draws on multiple data from various sources. The World Bank s World Development Indicators (Bank 2011) provide economic variables and controls, and Worldwide Governance Indicators (Bank 2011) provides the rule of law metric. The World Governance Indicator, Rule of law metric captures perceptions of the extent to which agents have confidence in and abide by the rules of society, and in particular the quality of contract enforcement, property rights, the police, and the courts, as well as the likelihood of crime and violence (Bank unknown). Transparency International provides the Corruption Perceptions Index (International 2011) which is used as a measure of good governance. Corruption Perceptions Index is an aggregate indicator that ranks countries in terms of the degree to which corruption is perceived to exist among public officials and politicians (International 2011). The Correlates of War Trade data (Barbieri 2012; Barbieri, Keshk, and Pollins 2009) provides import and export dyadic data. AidData (Tierney et al. 2011) is the source of all bilateral and

4 multilateral aid. Polity IV from the Center for Systemic Peace (Marshall and Jaggers 2010) is the source of the democracy metric. Specifically the revised polity2 variable is used in this study. The Cingranelli-Richards (CIRI) Human Rights Dataset (Cingranelli and Richards 2010) provides the physical integrity rights metric, a composite index of the occurrence of violations of torture, extrajudicial killing, political, imprisonment, and disappearance (Cingranelli and Richards 2010). Methodology This study employs fixed effects regressions using robust cluster standard errors to determine the conditionality of aid and the effectiveness of aid. All models also contain a one year lagged dependent variable within the right had side of the equation. The conditionality models are constricted to only EU-ACP dyadic relationships, and dependent variables are for individual years consisting of a one year lag and a three year lag. These one year and three year lags allow testing of whether aid is award one or three years after specific metrics of institutional development are observed. The effectiveness models utilize dependent variables that have been averaged across three years (year two + year three + year four) and are led three years. Averaging is the selected method because an analysis of individual years returned inconsistent results. The best goodness of fit model was in individual year three and having more than one year allows for aid or trade to potential affect institutional development. Dependent variables in the effectiveness model are standardized values though the independent variables are not. This allows for an interpretation of how differing amounts of aid correlate to effects in institutional development metrics, and the effects may be compared across metrics. Results First, models are run to assess whether or not EU bilateral aid and EU multilateral aid to ACP nations is awarded after improvements in the institutional development metrics. The table below, Conditionality of Aid, shows the results of this analysis. The four development metrics at the top of the regression outputs are the only factors being considered here. Physical Integrity rights show a negative trend with the following year of EU bilateral aid. A one standard deviation decrease in physical integrity rights observance correlates to an 18.8 dollars per capita increase in EU bilateral aid. An explanation for this occurrence might be that bilateral aid is quick to support nations that are struggling with these basic human rights. This relationship does not occur in aid 3 years after the change in human rights. This finding on conditionality of physical integrity rights contradicts Neumeyer s (2003b) Democracy improvements are correlated with increased bilateral aid for both year 1 and year 3. A one standard deviation increase in democracy correlates to a 25 dollars per capita increase in bilateral aid in year one, and 13 dollars per capita increase in year 3. This is evidence of the Cotonou agreement s political conditionality for democracy. Bilateral aid is negatively correlated with the Rule of law at 112 dollars per capita decrease for aid in year one and 29 dollars per capita decrease in aid in year 3 for a one standard deviation increase in the Rule of Law. The model does not indicate whether aid is being withheld for Rule of law improvements or aid is being given when the Rule of law decreases. An optimistic view is that, like Physical Integrity rights, aid is going to nations that need it but this interpretation is not based upon evidence.

5 Good governance shows mixed results. One year after an improvement in governance, EU bilateral aid increases by 80 dollars per capita. Three years after improvement, aid decreases by 34 dollars per capita. Perhaps this is a signal that conditional bilateral aid responsiveness is depleted by year three. In other words, gains against governmental corruption are awarded the following year but cease and are decreased by year three. This finding on corruption supports Schudel s (2008) work. Table 1, Conditionality of Aid for EU-ACP nations ( , ) (1 year) (3 year) (1 year) (3 year) EU bilateral aid EU bilateral aid EU multil. aid EU multil. aid Physical Integrity *** *** *** (2.5812) (1.5947) (0.0000) (0.0000) Democracy *** *** *** *** (5.4277) (3.7623) (0.0001) (0.0000) Rule of law *** *** *** *** ( ) (7.4492) (0.0001) (0.0001) Good governance *** *** ** *** (9.5877) (5.4611) (0.0000) (0.0000) Observations R-squared Groups Standard errors in parentheses. * p<0.1, ** p<0.05, *** p< Institutional development metrics are standardized values. Control variables included in the models are excluded from the table for brevity. These controls include all variables in the effectiveness table, minus interactions. The second two conditionality regressions show EU multilateral aid on the institutional metrics. Three of the four metrics show positive relationships with multilateral aid for both years one and three, indicating that this type of aid is much more politically conditional that bilateral aid. However, good governance is negatively correlated with multilateral aid in both years one and three. This may indicate that the EU community is doing an adequate job of applying conditionality except for issues of government corruption. Or perhaps improvements in human rights, democracy, and law are fostering governmental corruption but this scenario seems less plausible. The EU multilateral aid variable is percentage of GDP, so the interpretation of each metric is: a standard deviation change in the institutional metric correlates with a (coefficient) percentage of GDP increase/decrease. The models of effectiveness regress the standardized institutional development metrics on aid, trade, and multiple economic controls. The physical integrity, rule of law, and good governance models each explain more than 70% of the variation in the dependent variables while the democracy model explains about 37%. The dependent variables are 3 year average metrics that are led three years. The results suggest that bilateral aid and trade has minimal impacts on the metrics while multilateral aid is much more affecting. The dependent variables only apply to non-dac states, so bilateral aid is that from any nation to a non-dac, non-acp state. The

6 models contain two types of dummy interactions: EU-ACP specific measures for bilateral aid, imports, and exports; and EU multilateral aid to ACP nations. Physical integrity rights, democracy, and governance metrics are each positively associated with aid to non-dac, non-acp states. A ten percent increase in the aid per capita to these states correlates to a standard deviation increase in average physical integrity rights three years later, a substantively small relationship. The effects of EU bilateral aid to ACP nations is also substantively minor if not inconsequential, although the coefficient on governance is negative. To obtain interpret the coefficient on EU bilateral aid to ACP nations, the coefficient from EU bilateral aid from non-dac, non-acp nations must be added. For physical integrity, this provides = Therefore, a ten percent increase in EU bilateral aid to ACP nations correlates with a standard deviation increase in average physical integrity rights observance in year three. This effect is substantively inconsequential, as is the effects of bilateral aid on the other institutional development metrics. The coefficients on exports and imports for both ACP and non-acp groups are also quite small, indicating that trade is also inconsequential on institutional development. Because of the small substantive effect and lack of clear relationships, no direct interpretation is here for the coefficients on imports and exports. Foreign direct investment (FDI) flows in and out of states are another substantively small finding but relationships are a bit clearer than for trade. FDI are not interacted variables, and generally have negative relationships with the developmental metrics expect for FDI out is positively correlated with the rule of law and FDI in is positively correlated with good governance. Causal relationships are not suggested for these variables since this paper posits no theoretical basis for FDI to cause changes in the dependent variables. FDI is included in these models as a control and the generally negative relationships are noted. To interpret one of the coefficients, a ten percent increase in FDI outflows is correlated with a standard deviation decrease in average physical integrity rights observance three years later. Government spending and private consumption are arguably substitutive with national income equations, and therefore the effects are opposing. These coefficients are larger than most other economic controls but are not near as large coefficients on multilateral aid. Government spending is positively associated with physical integrity rights, the rule of law, and governance but negatively associated with democracy. The directional signs on coefficients for personal consumption are opposite. A ten percent increase in government spending is associated with a standard deviation increase in governance. This is still substantively inconsequential.

7 Table 2, Effectiveness model of 3 year averaged metrics ( ) Phys. Int. rights Democracy Rule of law Governance Aid (per capita, log) 0.013* 0.023*** *** (0.007) (0.004) (0.002) (0.002) Imports (per capita log) ** 0.020*** (0.011) (0.011) (0.004) (0.006) Exports (per capita log) 0.021** ** ** (0.007) (0.006) (0.003) (0.005) *Aid, EU to ACP 0.034* 0.039** 0.017** *** Per capita log (0.020) (0.019) (0.008) (0.006) Imports to ACP from EU * ** Per capita log (0.033) (0.032) (0.015) (0.007) Exports to EU from ACP Per capita log (0.020) (0.015) (0.010) (0.007) FDI out (per capita log) *** *** *** (0.007) (0.005) (0.003) (0.004) FDI in (per capita log) ** *** *** 0.018*** (0.008) (0.006) (0.004) (0.004) Central government debt 0.004*** 0.002*** ** %GDP (0.001) (0.001) (0.000) (0.000) Govt spending 0.274*** * 0.040** 0.199*** Per capita log (0.026) (0.032) (0.018) (0.018) Private consumption, *** 0.106** *** *** Per capita log (0.052) (0.038) (0.023) (0.033) Total natural resources 0.010*** 0.009** 0.009*** *** %GDP (0.003) (0.003) (0.001) (0.001) EU multilateral aid) *** 5.512** *** %GDP (2.569) (2.617) (0.810) (1.214) EU multilateral aid *** *** %GDP (2.666) (2.684) (1.119) (1.301) UN program aid *** %GDP (1.310) (1.352) (0.283) (0.521) IMF aid (%GDP) *** 0.212** (0.126) (0.082) (0.050) (0.077) World Bank aid (%GDP) * ** (2.939) (1.182) (1.046) (1.538) Other multilateral 8.708** ** %GDP (2.754) (1.209) (1.463) (1.556) Constant 0.938** * 0.849*** 0.642** (0.392) (0.309) (0.157) (0.243) Observations

8 R-squared Groups Standard errors in parentheses and are robust cluster errors. * p<0.1, ** p<0.05, *** p< Year 2003 drops out due to fixed effects format. DV is led 3 years and is a 3 year average (one year before and after year one). Lagged dependent variables omitted. EU multilateral aid to non-acp nations is positively associated with physical integrity rights and democracy while the association with rule of law is negative. All of these coefficients are quite substantively large. These coefficients also represent percentage points of GDP rather than percent changes. A one percentage point (of GDP) increase in EU multilateral aid to a non- ACP state correlates with an increase of 0.27 standard deviations in average physical integrity rights in year three, the largest effect of the four metrics. This is a substantively large effect. This indicates that increasing multilateral aid to non-acp nations by ten percent of GDP can improve physical integrity rights by 2.7 standard deviations. A ten percentage point increase in aid correlates to a 0.55 standard deviation increase in democracy. However, the rule of law decreases by 0.83 standard deviations for the same aid increase. EU multilateral aid to ACP nations is a dummy interaction and must be interpreted in relation to EU multilateral aid to non-acp nations. A ten percentage point (of GDP) increase in EU multilateral aid correlates with a 0.32 standard deviation increase in average physical integrity rights in year three, a much smaller change than in non-acp nations but it is a substantial change. A ten percentage point increase in ACP aid correlates with a 0.26 standard deviation increase in average democracy scores three years after the aid. However, this same aid increase also correlates with a 0.37 decrease in the average rule of law for ACP nations three years after the aid. This shows that EU multilateral aid to non-acp nations and ACP nations is consistently productive at promoting human rights and democracy but at the expense of law and order, though the effects in ACP nations are much lower. Other multilateral aid categories also show important substantive effects, and are also in terms of percent of GDP. A ten percentage point increase in UN program aid to non-dac states correlates with a 0.54 increase in average democracy three years after the aid. IMF and World Bank programs have mixed results but both institutions aid are positively correlated with less governmental corruption three years later. IMF aid correlates negatively with rule of law, though substantively a small effect. A ten percentage point increase in IMF correlates with a 0.03 decrease in average rule of law three years later. A ten percentage point increase in World Bank aid correlates with a 0.55 decrease in physical integrity rights three years after the aid. The IMF and World Bank results may be explainable by the plight of the nations seeking or accepting IMF or World Bank aid. These nations may be forced into difficult circumstances which require more than three years to resolve rights observance and rule of law, though IMF/World Bank programs may decrease corruption more quickly. Discussion The difference in EU bilateral aid and EU multilateral aid indicates that multilateral aid is much more effective. The reason for this may be due in part to bilateral aid being awarded for based upon self-interest such as improving trade relations or gaining political favor, as a bulk of the literature on foreign aid donation indicates. However, this paper does not assess this proposition for EU-ACP aid so the comment is purely speculative.

9 Given that mean EU multilateral aid is about 2% of the average ACP nation s GDP, increasing aid by about 500% is not feasible given the EU community budget (See Appendix for select descriptive statistics). However, average bilateral aid from individual EU nations to ACP nations is much larger than average EU community aid to ACP nations. This, coupled with the decreased effectiveness of EU bilateral aid, provides evidence that EU nations should be investing in the community method if aid is going to be effective at promoting human rights and democracy. The negative effect of EU multilateral aid on the rule of law may be due negative consequences of development. As a government moves towards democracy and the nation s economy move towards capitalism, social pressures may be increasing for marginalized groups. The income inequality within a nation which increases due to entering the global economy may be part of the problem. This paper has not reviewed the relationship of democratic and market development with the rule of law but perhaps such a study could help donor s improve results. In term of counteraction, a good program to combat the negative trend in EU multilateral aid in the rule of law may be with targeted programs in ACP nations modeled after EULEX, the EU rule of law mission in Kosovo. Importance for EU politics The findings in this paper may be further considered along with two important issues in current EU politics, integration and the euro crisis. The euro crisis clearly is a situation in which a number of domestic governments must focus on maintaining and improving fiscal health and employment levels. For this reason, EU bilateral aid to ACP nations decreased from an average 38.5 million ($50 million dollars) in 2006 to about 25.4 million ($33 million) in EU multilateral aid decrease from an average of about 6.5 million ($8.5million) in 2006 to 354 hundred thousand ($4.6 hundred thousand) in These figures are according to data reported in AidData, not from official EU sources. The affect of reduced aid may mean that nations may slow in their institutional development, but perhaps nations on a trajectory of growth may continue with decreased or no current aid. Hopefully the decrease of aid is not so devastating that developing nations degrade in institutional development. As for integration, the primary lesson from this paper might be applicable to candidate nations. Though candidate nations and ACP nations have drastically different incentives for EU relations, some of the political conditions are similar. For instance, the Copenhagen Criteria focuses on democracy and human rights in addition to meeting EU policy standards. In using integration policy to promote democracy and human rights in candidate countries, the lesson of this paper suggests that the rule of law needs to also be an important policy focus. Though this brief discussion does not begin to assess the institutional development of candidate, or potential candidate countries to determine whether an increased focus on the rule of law is applicable for integration policy, the fact that the EU has implemented rule of law missions is a positive indicator of, and potential safeguard to integration policy. Conclusion To close, this paper has assesses the effectiveness of the Cotonou agreement upon the institutional development of ACP nations, finding that multilateral aid is much more effective than bilateral aid though there is a concern for the effects to the rule of law. This paper also assesses the conditionality of aid. The EU community seems to be basing aid on positive growth 2 Figures converted from current US$ using 2012 conversion of 1:0.77

10 in institutional development though it is failing to be accountable with corruption. Bilateral aid conditionality shows mixed results but is at least a positive relationship holds with democracy. Appendix A Select Descriptive Statistics for EU-ACP nations Variable Obs Mean Std. Dev. Min Max physint polity wgi_law cpi aid e e e euaid e e e+09 wdi e e e e+11 Akram, T The international foreign aid regime: who gets foreign aid and how much? Applied Economics 35 (11): Alesina, A., and D. Dollar Who gives foreign aid to whom and why? Journal of economic growth 5 (1): Alston, Philip International Trade as an Instrument of Positive Human Rights Policy. Human Rights Quarterly 4 (2): Bank, Word. unknown. Rule of law. Bank, World World Development Indicators Worldwide Governance Indicators. Barbieri, K Barbieri, Katherine and Omar Keshk Correlates of War Project Trade Data Set Codebook, Version 3.0. Online: org. Barbieri, Katherine, Omar MG Keshk, and Brian Pollins TRADING DATA: Evaluating our Assumptions and Coding Rules. Conflict Management and Peace Science, 26 (5): Barbieri, K., O.M.G. Keshk, and B.M. Pollins Trading Data Evaluating our Assumptions and Coding Rules. Conflict Management and Peace Science 26 (5): Burnside, C., and D. Dollar Aid, policies, and growth. World Bank Policy Research Working Paper (569252). Cingranelli, David L., and David L. Richards The Cingranelli-Richards Human Rights Dataset Version Short Variable Descriptions for Indicators in The Cingranelli-Richards (CIRI) Human Rights Dataset, Version Cottier, Thomas Trade and Human Rights: A Relationship to Discover. Journal of International Economic Law 5 (1): Dreher, Axel, Peter Nunnenkamp, and Rainer Thiele Are New Donors Different? Comparing the Allocation of Bilateral Aid Between nondac and DAC Donor Countries. World Development 39 (11): Hafner-Burton, Emilie M Trading Human Rights: How Preferential Trade Agreements Influence Government Repression. International Organization 59 (3): International, Transparency Corruption Perceptions Index Corruption Perceptions Index 2011: Long Methodological Brief.

11 Knack, S Does foreign aid promote democracy? International Studies Quarterly 48 (1): Lebovic, J. H., and E. Voeten The Cost of Shame: International Organizations and Foreign Aid in the Punishing of Human Rights Violators. Journal of Peace Research 46 (1): Marshall, Monty G., and Keith Jaggers Polity IV Project: Political Regime Characteristics and Transitions, : Dataset User's Manual. edited by C. f. S. Peace. Neumayer, E Do human rights matter in bilateral aid allocation? A quantitative analysis of 21 donor countries. Social Science Quarterly 84 (3): Is respect for human rights rewarded? An analysis of total bilateral and multilateral aid flows. Human Rights Quarterly 25 (2): Partnership Agreement. Petersmann, E.U How to Promote the International Rule of Law-Contributions by the World Trade Organization Appellate Review System. J. Int'l Econ. L. 1:25. Schudel, Carl Jan Willem Corruption and Bilateral Aid: A Dyadic Approach. The Journal of Conflict Resolution 52 (4): Svensson, J Why conditional aid does not work and what can be done about it? Journal of Development Economics 70 (2): Tierney, M.J., D.L. Nielson, D.G. Hawkins, J. Timmons Roberts, M.G. Findley, R.M. Powers, B. Parks, S.E. Wilson, and R.L. Hicks More dollars than sense: refining our knowledge of development finance using AidData. World Development. Younas, J Motivation for bilateral aid allocation: Altruism or trade benefits. European Journal of Political Economy 24 (3):