Foreign aid to Ukraine: Lessons from the literature on strategic foreign aid

Ukraine is currently receiving substantial inflows of foreign aid from western donors to help the country withstand the Russian aggression. The foreign aid flows partly reflect altruistic motives from the donor side, but also donor’s domestic strategic foreign policy objectives as the war is seen as part of a battle over the future world order. In this brief, Anders Olofsgård, discuss the academic literature that has analysed the existence and consequences of strategic motivations behind aid flows more generally, and draw some preliminary insights for the case of Ukraine.

In response to Russia’s war of aggression, Ukraine receives significant flows of both economic, military and humanitarian aid from Western countries. These flows are partly motivated by altruistic reasons, but also by strategic interests as the war is seen as part of a conflict between Western liberal democracies and authoritarian states over the future world order. The academic literature has analysed the existence of strategic motives behind development aid and its implications for aid effectiveness. To what extent does this literature have something to say about the potential and risks of aid in the case of Ukraine? Anders Olofsgård argues that the risk of significant misuse and inefficiency should be relatively low compared to previous cases, but that it is important that donor countries remain committed to the proper and effective use of funds. Strategic motives have also historically increased aid flows, which is beneficial if the inflows are well managed, and this is also what we are seeing at the moment in Ukraine.

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Contact

Anders Olofsgård
Associate Professor and Deputy Director, the Stockholm Institute of Transition Economics (SITE) at the Stockholm School of Economics (SSE)
Email: Anders.Olofsgard@hhs.se