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Foreign Aid and Political Parties in Latin America

Foreign Aid and Political Parties in Latin America. Javier Gonzalez INAF – 100 Professor James R. Vreeland. What is the question?. Political parties in: Latin America Donor countries Right-wing/Left-wing Influence on foreign aid Both observed

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Foreign Aid and Political Parties in Latin America

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  1. Foreign Aid and Political Partiesin Latin America Javier Gonzalez INAF – 100 Professor James R. Vreeland

  2. What is the question? • Political parties in: • Latin America • Donor countries • Right-wing/Left-wing • Influence on foreign aid • Both observed • Does the party of the executive power in recipient countries affect the amount of foreign aid that is received by the country? • Does the party of the executive power in donor countries also have an effect?

  3. Introduction • Politics • The Right and the Left • Donor • Recipient • Rise of the Left in LA • Executive heads • Foreign Aid • 23 OECD-member donors • 17 LA countries

  4. Background • Democratization • Reagan administration • Economic growth in LA • Exponential in the last decade • Poverty levels • Reforms in LA • Led by the Left • Economic • Leadership

  5. Hypothesis • Donor nations do take political positions of recipients’ executive head into consideration; therefore, they tend to provide more aid to countries that share similar political ideologies, and less to those that do not. • Donor interest • Political/Economic • Aid • Hegemony

  6. Methods of Observation • Analyze • Party in power • Right-wing or Left-wing? • Employ • OECD • Foreign aid • World dataBank • GDP per capita • GDP annual growth • WB Database of Political Institutions • Right or Left? • Conclude • Observe • Correlations • Fallacies • Error

  7. Observations • Donor countries (23) • OECD members • Recipient countries (17) • North and South America • Australia • Austria • Belgium • Canada • Denmark • Finland • France • Germany • Greece • Ireland • Italy • Japan • Korea • Luxembourg • Netherlands • New Zealand • Norway • Portugal • Spain • Sweden • Switzerland • UK • USA Argentina Bolivia Brazil Chile Colombia Costa Rica Ecuador El Salvador Guatemala Honduras Mexico Nicaragua Panama Paraguay Peru Uruguay Venezuela

  8. Observations • 1960-2010 and 1990-2010 • Why 1990-2010? • Political tendencies • Present political preferences • Donor ex. • Leans Right: • Japan • Leans Left: • Sweden • NP/Centrist: • Finland • Recipient ex. • Leans Right: • Colombia • Leans Left: • Brazil • NP/Centrist: • Mexico • 3 Categories: • Leans Right or (1) • Left (3), • Or NP/Centrist (2)

  9. Observations • Also observed: • From 1960-2010 • GDP per capita • Annual GDP growth • Why? • Principal purpose for FA • Validity } Recipient countries

  10. Findings • Regressions • Right-wing donors • Not statistically significant • p-value of 0.62 • > .05 • Left-wing donors • Not statistically significant • p-value of 0.85 • > .05 • NP donors • Not statistically significant • p-value of 0.94 • > 0.05

  11. Findings • Regressions • All donors (both Left and Right) • Not statistically significant • p-value of 0.87 • > 0.05 • All donors & GDP per capita • Statistically significant • p-value of 0.00 • < 0.05 • All donors & annual GDP growth • Not statistically significant • p-value of 0.13 • > 0.05

  12. Conclusions • Parties and Foreign Aid • No correlation • Right, Left, nor NP • GDP and Foreign Aid • Correlation • More poverty = more aid • Validates claims • Annual GDP • No correlation • No political interest apparent • Donor nations • If any political interest, poverty is still prioritized • Question of hegemony • Recipient nations • Party has no effect • Finally, • Social misconceptions • Hypothesis not proved • Poverty and foreign aid

  13. Conclusions • The political ideology of the recipient’s executive head seems to have no effect on the amount of foreign aid received • Room for error: • Overlooked observations? • Time period • Human rights • El Salvador • Venezuela • Military assistance • Anti-guerrilla/anti-narcotics • Brazil, Colombia, Mexico

  14. Image sources, in order: http://3.bp.blogspot.com/-4qmNSMIHiyA/T32eArLad-I/AAAAAAAAAvo/amXSz8SM_Jg/s1600/Latin-America-Map.jpg http://nimg.sulekha.com/others/original700/cristina-kirchner-luiz-inacio-lula-da-silva-dilma-rousseff-2011-7-29-18-41-8.jpg http://cryptome.org/info/obama-protect42/pict26.jpg http://www.iamericas.org/images/stories/poverty_latin.jpg http://graphics8.nytimes.com/images/2009/01/26/timestopics/bolivia_395.jpg

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