Does Corruption Cause Aid Fatigue?

Abstract

Does corruption reduce support for foreign aid? General explanations for aid fatigue, such as meagre development results and the perception that taxpayers’ money is being wasted fail to solve what we call the aid-corruption paradox, namely that the need for foreign aid is often the greatest in corrupt environments. Corruption can be seen as an external impediment on the effectiveness of aid, but also as an internal and important target of aid-driven efforts to improve governments. This paper explores the influence of corruption on support for foreign aid and conditions under which corruption causes aid fatigue. Building on studies of the motives for foreign aid and the social acceptability of corruption, we suggest that the relationship between corruption and aid fatigue substantially depends on fundamental beliefs about the role of foreign aid. The analysis builds on data from the 2009 Eurobarometer survey. Our findings have implications for understanding the consequences of the remarkable increase in exposure of corruption in recent years, efforts to tackle global environmental challenges, and fundamental relationships between corruption and aid legitimacy.