Does foreign aid affect domestic political unrest? ‘Selectorate’ models of political survival predict that foreign aid should lead autocratic governments, but not democratic ones, to restrict civil liberties. This requires investment in repressive capacity, which should in turn deter unrest. We thus argue that foreign aid should reduce unrest in autocracies but not in democracies. We find strong support for this hypothesis in a sample of 84 countries from 1970 through 2007, as well as evidence for our causal mechanism. Our results add to the mounting evidence that foreign aid has more desirable effects when targeted at democratic regimes.
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