Publication

This paper reviews the evidence regarding the potentially negative effects of aid dependence on state institutions and describes several pathways through which political institutions might be adversely affected by focusing on fiscal and state revenue issues. The author also brings in the long-standing political science literature on state-building to consider the potential impact of aid dependence on the relationship between state and citizen. The author concludes that states which can raise a substantial proportion of their revenues from the international community are less accountable to their citizens and under less pressure to maintain popular legitimacy.