A new paper by Ilyana Kuziemko and Eric Werker finds that joining the Security Council results in a 60% increase in foreign aid, and an 8 percent increase in aid from UN bodies; and that it returns to normal when the country’s time on the Security Council comes to an end.
Using country-level panel data, we find a large positive effect of Security Council
membership on foreign aid receipts. On average, a non-permanent member of the council enjoys
a 59 percent increase in total aid from the United States and an 8 percent increase in total
development aid from the United Nations. Further results lend strong support to the bribery
hypothesis over the two alternative hypotheses mentioned above. First, we find that aid to
Security Council members is significantly larger during key diplomatic years—that is, years in
which the United Nations receives an especially large amount of media coverage, or in which a
major international event occurs. The variation used to identify this effect is plausibly
exogenous; it is driven by the fact that some countries serve on the Security Council during
relatively calm years while others, by chance, are fortunate enough to serve during a year in
which a key resolution is debated and their vote becomes more valuable.
Second, aid payments sharply increase in the year that a country is elected to the Security
Council, remain high throughout the two-year term, and return to their earlier level almost
immediately upon completion of the term. The sharp increase challenges the notion that the
correlation is being driven by an unobserved, secular change in a country’s international
influence or diplomatic savoir-faire. Similarly, the rapid return to baseline aid levels after a
country has completed its tenure suggests that the aid is not due to a newfound awareness of the
country’s needs. Instead, the discontinuous pattern of aid suggests that Security Council
countries experience a windfall of aid only during the period when they enjoy increased
influence in the United Nations.
In Britain, the International Development Act makes it illegal to use aid for anything other than the relief of poverty; but as far as I know, the act does not prohibit the government from focusing its poverty reduction efforts on countries that are politically or strategically useful for other reasons.