From domestic to international justice: the welfare state and foreign aid

TLDR

Foreign aid is often viewed as an international extension of domestic income redistribution, and existing studies link it to welfare state characteristics measured by domestic spending and partisan politics. The study proposes that incorporating welfare state institutional attributes can enhance explanations of the welfare‑aid relationship. The authors introduce a third welfare state indicator based on institutional attributes and show its relevance to foreign aid. Foreign aid levels correlate with social spending and are even more strongly linked to the socialist attributes of a welfare state, illustrating how domestic political institutions shape international cooperation.

Abstract

Foreign aid often is interpreted as an international projection of domestic income redistribution mechanisms, and many authors suggest that differences between welfare states account for variations in donor behavior. A new understanding of the welfare state can improve traditional explanations of this linkage. Existing studies of the welfare–aid relationship use two welfare state indicators: domestic spending and partisan politics. We propose a third type of indicator—the institutional attributes of the welfare state—and demonstrate its relevance. The level of foreign aid provided by a country varies with social spending, but even more so with the degree to which its welfare state embodies socialist attributes. This finding helps explain how domestic political institutions influence the evolution of international cooperation and, specifically, how welfare principles institutionalized at the domestic level shape the participation of developed countries in the international aid regime.