The Impact of USAID Funding on Democracy Building

This morning, the CSIS Hills Program on Governance hosted an event titled “The Impact of U.S. Foreign Assistance on Democracy Building, 1990-2004.” By way of background, USAID commissioned a team of researchers (from the University of Pittsburgh and Vanderbilt University) to evaluate the impact of USAID’s democracy and governance (DG) assistance programs in countries across the world. In the first phase of the project, the research team found, to the surprise of many, that USAID democracy assistance had a positive effect on countries’ democratic trajectories over time ($10 million of DG assistance translated into a 0.25-point increase in a country’s Freedom House score). In the second phase, which was the focus of this morning’s event, the team sought to confirm the findings of the first phase as well as explore related questions about the effectiveness of aid. Once again, the researchers found a positive correlation between DG assistance and democracy building (this time, $10 million of DG assistance translated into a 0.29-point increase in Freedom House score). In addition, they found that DG aid had the greatest impact in countries with low levels of human development, more ethnic fractionalization, and weak states.

This research team’s analysis displays impressive rigor. They recognize and thoroughly address a host of methodological concerns and conceptual challenges in answering the fundamental question, “does aid really work?” Although the report bolsters the arguments of economists like Jeffrey Sachs and other advocates of foreign aid, the research team and the independent advisory panel also acknowledge that much work remains. More frequent and extensive data collection and higher data quality are necessary for a deeper understanding of the impact of U.S. foreign aid on outcomes in democracy building, governance, and many other issues.

The website for the project is located here, where you can find the Phase I report and dataset as well as a PowerPoint presentation on Phase II of the project. To hear the audio recording of today’s event at CSIS, please click here.