Can Western Donors Constrain Repressive Governments? Evidence from Debt Relief Negotiations in Africa

Abstract

There is limited evidence that reliance on foreign aid from Western donors compels repressive governments to embrace democratic reforms and respect citizens’ rights. However, donors have another, potentially more powerful source of financial leverage: debt relief. This paper exploits two features of the Heavily Indebted Poor Countries (HIPC) debt relief initiative, launched by the International Monetary Fund and World Bank in 1996, to probe whether Western leverage has constrained repression across Africa. First, the Bretton Woods institutions initiated debt relief negotiations with virtually all African governments. Second, many recipients were in power long before HIPC negotiations began and remained after they concluded. Using a differences-in-differences estimator, I show that the daily rate of repression fell by between 10% and 30% during debt relief negotiations. This effect holds across autocracies and democracies, and during periods of sustained protests. When debt crises were more severe, debt relief negotiations were even more constraining.