When does more aid imply less democracy? An empirical examination

► We investigate whether aid has affected the political regime of recipient countries. ► A panel of 64 aid-recipients over 1967-2002 is employed, because of data limitations. ► Aid decreases the probability of observing a democratic regime in a recipient country. ► This effect is sensitive to economic and social conditions. ► Economic liberalization moderates the negative political impact of aid.