Aid, Resource Rents and the Politics of the Budget Process

Aid, Resource Rents and the Politics of the Budget Process

This paper analyzes the combined impact of political, institutional, and budget procedures on budget outcomes in aid- and resource-dependent countries. The paper builds on a new dataset of 47 low and lower-middle-income countries whose economies depend on aid or natural resource inflows between 1995 and 2006. The empirical section identifies some trends that qualify conventional beliefs about the importance of executive power on the budget process and helps identify some areas where more empirical and conceptual research is needed to understand the political factors underlying the budget process and producing budget outcomes.