Do Countries Use Foreign Aid to Buy Geopolitical Influence?

Evidence from donor campaigns for temporary UN Security Council seats

Do countries use foreign aid to support their campaigns for a temporary seat in the UN Security Council?
BERNHARD REINSBERG found some robust evidence of campaign-induced aid growth for some aid channels and under some circumstances. In particular, as donor experience increases, bilateral aid growth increases, whereas multi-bi aid growth tends to decline, he writes in a paper titled “Do countries use foreign aid to buy geopolitical influence?” (WIDER Working Paper 2019/4) for Helsinki-based United Nations University World Institute for Development Economics Research.
“Conversely, multi-bi aid growth increases with declining quality of governance and with the level of internationalization of a given donor.”
A noteworthy limitation of this research, REINSBERG states, is that some findings can still be interpreted in various ways. For example, while internationalization boosts multi-bi aid growth, it does not seem to affect bilateral aid growth. One interpretation is that there really is no effect on bilateral aid growth, but another one is that bilateral aid declines but the analysis fails to produce a statistically significant effect, for example due to measurement error, he states.
Despite best efforts, the data collection might be incomplete, which would generate measurement error. Other sources of insignificant effects include under-powered tests due to short time series as well as donor heterogeneity, REINSBERG writes. These are common challenges of quantitative analysis that also this article cannot defy. Nonetheless, the above analysis produced results that are remarkably robust against several modifications, including instrumental-variable estimation.
Albeit necessarily preliminary, the author states, these findings suggest interesting avenues for future research. They demonstrate that donors care about UNSC membership. Existing studies emphasize the aid rewards for recipient countries during their temporary UNSC tenure. Future research could examine how aid flows evolve over the lifetime of a UNSC campaign, given that donors (including the ones that do not get elected) are likely to lessen aid effort once uncertainty is resolved after the outcome of a UN General Assembly election.
“Studying how aid evolves during UNSC tenure would also hint to donor motivations in this context and specifically which donors use aid for private gain versus fostering international solidarity,” REINSBERG states. In this context, further research into donors of specific UN constituencies would be promising. For Eastern European Group donors, qualitative research would be necessary given the lack of long time-series data (Szent-Iványi, Reinsberg, & Lightfoot, 2018).
Capturing the donor perspective, future research could also examine the choice of instruments other than aid for supporting UNSC campaigns. Research could also explore which recipients stand to gain most from donor campaigns for UNSC seats. Ultimately, researchers should examine the effectiveness of campaign-induced aid. Although previous research finds that aid extended to developing countries during their temporary UNSC tenure is less effective (Dreher, Eichenauer, & Gehring, 2016), this does not need to be the case for campaign-induced aid for which donor motives are less clear.

Gunter, Bernhard G. Do Countries Use Foreign Aid To Buy Geopolitical Influence?: Evidence From Donor Campaigns For Temporary UN Security Council Seats, WIDER Working Paper 2019/4  Helsinki: UNU-WIDER, 2019.