To Invest or Insure?

Abstract

In this article, the author argues that the time horizon a dictator faces affects his incentives over the use of aid in three ways. First, dictators have a greater incentive to invest in public goods when they have a long time horizon. Second, dictators with short time horizons often face the threat of challengers to the regime; this leads them to forgo investment and instead consume state resources in two forms that harm growth: repression and private pay-offs to political opponents. Third, dictators with short time horizons have a strong incentive to secure personal wealth as a form of insurance in case the regime falls. Using panel data on dictatorships in 71 developing countries from 1961 to 2001, the author finds that time horizons have a positive impact on aid effectiveness: Foreign aid is associated with positive growth when dictators face long time horizons and negative growth when time horizons are short.

Cite this work

No public copy is stored for this record, so only the metadata is cited.

Stored only when both papers are in the corpus — 117 citations exist upstream.

Papers that cite the same references — the relational fallback while embeddings are still backfilling.