Veto players and foreign aid provision

Abstract

This study investigates how the political institutions of developed economies influence their foreign assistance. Specifically, we argue that the number of effective veto players has a negative effect on the volume of aid provision. To provide foreign assistance, the incumbent government in a donor country must have unanimous support from all effective veto players in policy making. Thus, it has more barriers to overcome when the polity is characterized by many and preference- wise heterogeneous veto players. By examining the official development assistance outflows of 27 OECD countries for the period of 1977-2006, we find empirical patterns that corroborate our argument.

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