Geopolitics, Graft, and Foreign Assistance: Do Corrupt Governments Receive More Aid?

Given the Trump administration’s move to close USAID, cancel most of its aid contracts, and layoff many of its employees, there has been some talk about the geopolitical risks of such actions, the most notable being the insertion of China in the development activities of many nations. Indeed, China has made funding announcements in programming areas where the US has pulled out.

This is an interesting debate, with the main reason cited by the US is based on the effort to reduce waste and overspending at the federal level.

But there are several dimensions to this decision by the US, as well some interesting empirical findings, driven by our ICRG data.

In a now classic study published by the National Bureau of Economic Research, the following question was asked: Do corrupt governments receive more foreign aid than less corrupt ones?

One of the conclusions is that ‘according to most measures, corrupt governments actually receive more foreign aid rather than less’ assistance!

Have a look when time permits. (https://lnkd.in/eVPuNsHR)

With over 7.5 million back tested risk points – and appearing in over 1,000 published works – PRS’ data series continues to produce meaningful empirical findings, profitable asset allocations, and informed corporate planning and valuation.

No other geopolitical risk firm occupies this position in the industry.

Our clients know it.

Our data drives.

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