Effective Foreign Aid Following Civil War: The Nonstrategic‐Desperation Hypothesis

Abstract

When does aid foster development after civil war? A testable model is needed to account for the uneven outcomes in postconflict development. This article proposes and empirically tests the novel nonstrategic‐desperation hypothesis, an explanation based on the varied incentives that fragile postconflict governments face when confronted with donor development goals. Paradoxically, incentives to meet development goals only exist when donors have little strategic interest in the recipients and when recipients lack income from resource rents and are therefore desperate for income. Ten‐year data on infant mortality changes following civil wars ending 1970–96 and a variety of robustness checks support the hypothesis. By focusing on how income sources constrain the choices of aid recipients, and how these constraints can provide incentives to meet donor development goals, the nonstrategic‐desperation hypothesis explains how the good use of aid can take place following civil war, when institutions are weak.

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