The World Bank: Regime-type and Emergency Aid

BY: ASHWIN PURI AND ZACKARY ABU-AKEEL

Premise

Does the World Bank take regime-type into account when allocating disaster-relief aid?

The World Bank and Humanitarian Aid•“End extreme poverty and promote shared prosperity”• Official World Bank goals

•Help states in need• Reconstruction emphasis

•$20 Million to Yemen after 1996 flooding

•$62 Million to the Philippines after 2013 Typhoon Haiyan

Devastation after Typhoon Haiyan in the Philippineshttp://climatedesk.org/2013/11/natural-disasters-cost-3-8-trillion-since-1980-world-bank-says/

Hypothesis

Democracies (regime-type) receive foreign aid from the World Bank more frequently than autocracies.

•Introduction of a second dependent variable:Amount of aid included in programs

Hypothesis

Democracies (regime-type) receive foreign aid from the World Bank more frequently and in higher

amounts than autocracies.

Variables

X: Regime-Type of Country

Y1: Frequency of response to

emergency crises

Y2: Size of aid grants given in response

Literature Review• Flores and Smith (2012)

• Disasters have the most destabilizing effect on autocracies

• Boussalis (2011)• Autocracies respond less effectively to

disasters

• Becerra, Cavallo, and Noy (2012)• Regime type does not affect allocation of

foreign humanitarian aid in the UN

• What about in the World Bank?

Regime-Type DataPrzeworski, Alvarez, Cheibub, and Limongi (2000) Democracy and Development

Regime-Type is measured by a countries adherence to 3 rules:

• Rule 1: The chief executive must be elected• Rule 2: The legislature must be elected• Rule 3: There must be more than one party

Emergency Crisis DataEM-DAT: The International Disaster Database•Contains all disasters, separated by country affected, from 1900-2014

•“Disaster” defined by one or more of the following:• 10 or more people reported killed.• 100 or more people reported affected.• Declaration of a state of emergency.• Call for international assistance.

•Allows limiting data to country-years of disaster

World Bank Disbursement Data AidData Database•Grants provided by the World Bank categorized for emergency aid or disaster relief purposes• 597 programs offered from 1946 to 2008

•Merged with the EM-DAT database to show which country-years of disaster the World Bank responded to with a program

MethodologyINDEPENDENT VARIABLE

Regime TypeDichotomous indicator. Coded for whether a country is a democracy or autocracy

DEPENDENT VARIABLES

Frequency of ResponseDichotomous indicator. Coded for whether a country received a program or did not.

Unit of Country-Years

Amount of Aid Constant 2011 USD

MethodologyControl Variables:

Geographical Position

Severity of Disaster GDP per capita Population

Case Studies: Egypt and Albania

Case Studies: Egypt and Albania•Notably high amount of disasters from 2000 to 2006• Not one World Bank program

•Low amount of disasters from 1999 to 2008• Multiple World Bank programs starting in 2003

•Effect of European Union’s 2003 statement identifying Albania as a potential candidate to join the Union?

Preliminary Results

Autocracy Democracyn=2255 n=2155

St. Dev. 0.3107068 St. Dev. 0.3263351

0.1

0.105

0.11

0.115

0.12

0.125

0.108204

0.1211137

Graph 1: World Bank Response By Regime

Regime Type

Mea

n Re

spon

se

Autocracy Democracyn=244 n=261

St. Dev. 388000000 St. Dev. 426000000

0.00E+00

5.00E+07

1.00E+08

1.50E+08

2.00E+08

2.50E+08

3.00E+08

1.88E+08

2.53E+08

Graph 2: World Bank Relief Aid Amount By Regime

Regime Type

Mea

n Ai

d Am

ount

(201

1 US

D)

Suggests democracies receive programs more often and with larger values

Results: Frequency of Response

Results: Amount of Aid

Conclusions

There is a statistically significant relationship between the frequency of disaster-relief aid from the World Bank and regime-type.

The World Bank gives more disaster-relief programs to democracies than autocracies.

Implications•Citizens of autocracies receive less help

•Democracies are better able to handle disasters (Smith)o Using aid dollars more effectively

•Control of the World Bank lends itself to a democratic bloco Leadership, decision-making

•Does the World Bank advocate for democracy?

•Further research required:o Similar organizations

Questions?