Political Orientation of European Donor Countries and its Relationship with Foreign Aid

Sammanfattning

This thesis investigates whether foreign aid is impacted by government ideology in 18 European countries between 1990-2019. We apply a panel individual fixed-effects model and subject the relationship between government ideology and foreign aid to further controls not utilised in previous papers, the main one being the share of radicals in the parliament which we control for and interact with the government ideology variable. Our initial results from the model support previous findings. The results, however, become inconclusive after applying robustness checks, which indicates that government ideology might not have as significant of an impact as showcased in previous research. We discuss that this might be due to changing trends in the European foreign aid context, with higher domestic Official Development Assistance spending depressing the relationship. We suggest that government ideology might impact foreign aid allocation more than the total level of aid but that further research is necessary to establish any causal relationship between higher domestic Official Development Assistance spending and ideology.