DO SANCTIONS SIGNAL FOREIGN AID DETERRENCE? : A Quantitative Study on the Signaling Effect of Sanctions on Foreign Aid.

Sammanfattning: Both sanctions and foreign aid are common foreign policy tools. States which violate international norms are often sanctioned by senders, at the same time those may be the states in the most need of aid. In addition, previous research has shown that donors often give aid in line with their own interest, and at the same time sanctions only are effective if they are imposed collectively. This study aims to combine and explore these two themes, sanctions and foreign aid, and examine the relationship between them. Building on previous research, this thesis applies the signaling theory and the outcast effect on sanctions, but adds novelty by operationalizing the variables differently on new data. This thesis proposes two hypotheses, where H1 states that an increase in the number of sanctions lead to a decrease of aid donations and H2 assumes that multilateral aid donations decrease more than bilateral aid then. The hypotheses are tested with an OLS regressions and a Robustness test on data derived from six datasets. In addition, another recommended statistical test is conducted, a Wald Test. Both hypotheses find support with the main empirical analysis, while no relationship is found significant between the independent and dependent variables using the Wald Test. Due to the limitations of the thesis the validity of the results are questionable. Nevertheless, the results point to the additional need of research concerning these themes.