Keywords

1 Introduction

The following study has the aim of investigating the effects of development support provided by emerging and traditional donors in various OSCE areas. In particular, it seems relevant to compare the impacts of aid provided by China and Russia with the effects of that provided by the US, the EU, and European countries in four different OSCE regions: Central Asia, the Caucasus, the Western Balkans, and Eastern Europe. Following their political declarations and statements, traditional donors have been more focused on supporting recipients’ political changes in order to improve their democratic processes; meanwhile, emerging providers seem more focused on improving the recipients’ economic growth through mutual cooperation programmes. In this context, beyond analysing the different aid modalities and aid provider’s recent history in this field, the article will examine if development support provided by the above-mentioned actors has improved democratic performance and economic growth, and reduced local corruption in the recipient countries.

2 The Silent Revolution in the Development Aid Sector

Given the increase in the number of development aid donors (Paulo & Reisen, 2010) from the end of the Cold War, studies now tend to agree that international cooperation is facing what might be called a “silent revolution” (Woods, 2008), where new actors present themselves as a valuable alternative for aid-receiving countries (Dreher et al., 2011), thus undermining or scaling down the activity of traditional ones. Scholars have tried to categorize donors into different groups, dividing between traditional and emerging donors (Bakalova & Spanger, 2013; Walz & Ramachandran, 2011; Zimmermann & Smith, 2011). Actors in the first group include those operating inside the OECD’s Development Assistance Committee (DAC), such as European Union (EU) institutions, EU members, the US, and Japan, while the second group includes multilateral development banks such as the Asian Infrastructure Investment Bank and countries with emerging economies such as China, India or Turkey (Altunişik, 2014; White, 2011). Russia itself is considered by scholars as a re-emerging donor (Bakalova & Spanger, 2013; Larionova et al., 2016), considering the increase in development aid in the two decades following the post-Cold War crisis (Larionova et al., 2016). Some authors, however, have stressed that this division is fairly vague (Dreher et al., 2013).

This chapter describes the evolution of the development aid sector in the OSCE region and analyses how scholars have studied the effects of these development aid actors on recipient countries (Nogueira de Morais & Virtanen, 2015; Sato et al., 2010), with a particular focus on economic growth (Moreira, 2005), on democratic progress (Askarov & Doucouliagos, 2013; Knack, 2004), and on corruption (Asongu, 2012; Okada & Samreth, 2012).

Studies on the relationship between development aid and economic progress have found that financial support from specific donors enhances economic growth while aid from others does not promote economic development (Davies, 2010; Minoiu & Reddy, 2010; Park, 2011). While scholars studying the relationship between aid and democratic progress have found opposing outcomes. Though some scholars have discovered a positive correlation (Dunning, 2004; Goldsmith, 2001), others have found a negative/neutral correlation (Crawford, 1997; Djankov et al., 2008; Smith, 2008), or did not find any significant effect (Knack, 2004).

In this, the literature has highlighted the differences between foreign aid provided by traditional donors and that provided by emerging donors. As a matter of fact, traditional donors are more committed to supporting the recipient nation’s democratic progress, offering conditional aid (Orbie, 2011). Conversely, emerging donors provide aid unconditionally, without interfering in the recipient’s governance issues (Dreher et al., 2011; Lammers, 2007); thus, new providers such as China, Russia, or India are expected to provide financial support without using the Western approach, where development aid is focused on good governance, the fight against corruption, and human rights protection (The Economist, 2010).

If traditional donor aid cannot provide a relevant input for the whole democratic process of recipient countries due to their local background, their controlled support may yet enhance some democratic aspects, such as slowing down the prevalence of corruption in beneficiary countries. Differently, even though the emerging donor support is more effective in aiding economic growth, this unconditional aid may be misused by local institutions as found by studies concerning Chinese development aid in Africa (Isaksson & Kotsadam, 2018).

As discussed above, a comprehensive assessment looking into the different fields of OSCE work and the regional differences among its 57 member states is still missing in the literature. Scholars have thus far only analysed aid impacts on specific regions, such as the Western Balkans (Pickering, 2010), Central Asia (Arazmudarov, 2015), the Caucasus (Wetteland, 2020), and Eastern Europe (Wedel, 2015). Development aid to these regions is sent by both traditional and emerging donors, such as EU institutions, European countries (Germany or France), the US, China, and Russia. Therefore, it seems relevant to have a more general analysis which examines the impact of aid provided by the above-mentioned donors in the OSCE territories.

3 Traditional and Emerging Donors: Different Actors, Different Approaches

In the last several years, recipient countries of the OSCE area had the opportunity to receive development aid both from traditional and emerging donors. Therefore, it is important to describe the different approaches taken by such providers with OSCE recipient countries. In particular, the following paragraph aims to explain the perspectives of the traditional donors, as well as emerging donors China and Russia which collectively are the most active donors in the area.

3.1 Traditional Donors (Western Countries)

The literature typically classifies traditional donors as the group of providers coming from the “Western world,” including the US, EU institutions, EU member states, Japan, and Korea. These providers, in line with the theories of exporting liberal pluralism (Kymlicka & Opalski, 2002), have sponsored their aid conditionality, using allocations as important tools in order to promote democratic systems in recipient countries (Orbie, 2011). The most relevant example concerns the European Union, which supports democratic openness in different OSCE regions (such as the Western Balkans or Eastern Europe), offering conditional aid or the European memberships (Koch, 2015; Schimmelfennig & Scholtz, 2008). An example of this approach is the EU Instrument for Pre-accession Assistance (IPA IIIFootnote 1) approved by the European Parliament in June 2021, which allows for the possibility of assistance suspension in case of recipient country democratic backtracking.

Nevertheless, despite the rhetoric of declarations, studies have found that the previous performance of recipients (Maizels & Nissanke, 1984), level of corruption (Alesina & Weder, 2002), and respect for human rights (Neumayer, 2003) were not important factors in determining traditional donors’ aid allocation. Conversely, the same studies have found that aid allocation is more strongly influenced by donor political interests. Therefore, the aid sent to OSCE regions by traditional donors should have the real goal of spreading their influence in these areas.

Despite the negative trend concerning development aid in the OSCE area provided by traditional donors, the financial support of these providers is still more relevant than that allocated by emerging donors (Fig. 2.1).

Fig. 2.1
A line graph of traditional donor aid allocation in the O S C E area from 2012 to 2019. E U has the highest value in 2012 at around 3700.

(Source OECD Data https://data.oecd.org/)

Traditional donor aid allocation in the OSCE area from 2012 to 2019

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According to the OECD, unlike the approach taken by emerging donors, traditional donor development aid is focused on democratic progress and the rule of law.

3.2 A Newer Player in the Field of Development Aid: China

Since 1970, China has grown into a relevant provider of financing for global development (Bräutigam, 2011). According to China’s International Development Cooperation in the New Era (Chinese Government, 2021), China spent RMB270.2 billion (US$42.0 billion) on its international cooperation efforts between 2013 and 2018 (approximately RMB45 billion or US$7.0 billion annually) (Johnson & Zuhr, 2021). Nevertheless, this data represents only a small fraction of Beijing’s engagement in developing countries. Against this background, the Chinese government has stressed how its development of cooperation is different from that of the OECD donors, as Beijing’s cooperation is “a form of mutual assistance between developing countries” (Lorenzo, 2021). This new concept of mutual assistance, different from the idea of traditional donor foreign aid, was expressed by Xi Jinping himself (Johnson, 2016), who stressed the great role of China in the new international order resolving global and development issues and mainstreaming the UNSDGs 2030 Agenda. The Belt and Road Initiative (BRI) represents the country’s tool to implement this vision of the global community, where the Chinese financial support is mainly focused on economic growth.

Considering the Chinese approach, it is difficult to fit Beijing’s development finance into the OECD framework which is used by the majority of literature (Johnson & Zuhr, 2021). China usually provides funds for a specific project through multiple mechanisms. For example, the BRI includes commercial, non-commercial, financial, and non-financial contributions to development. Some of these may be considered foreign assistance by China, while others may qualify as ODA, and yet others could only be categorized as development finance more broadly. The methodological of this paper section provides more details on how Chinese aid may be tracked.

China’s commitment to development was also highlighted by the latest White Paper provided by the Chinese government (Oh, 2020). Between 2003 and 2018, Beijing allocated US$42 billion to foreign assistance. Over half of these funds took the form of loans, usually with a preferential interest rate of 2–3%. The other 47% was given as grants. These financing mechanisms are used by Beijing to fund projects related to social welfare, human resource development, technical cooperation, material assistance, and emergency humanitarian assistance (Fig. 2.2). Concessional loans, on the other hand, are used for industrial and infrastructural projects, and goods and materials. Even though China’s foreign assistance focuses on African countries, the share of Chinese assistance to African countries fell in the 2013–2018 period in favour of assistance to Asian countries. This may also be caused by Beijing commitments in Central Asia through the Belt and Road Initiative and the Shanghai Cooperation Organization.

Fig. 2.2
Two stacked bar graphs compare China's average annual foreign assistance by type of flow and recipient region. From 2013 to 2018, both were at 7.0.

(Source Donor Tracker https://donortracker.org/)

China’s average annual foreign assistance by type of flow and China’s average annual foreign assistance by recipient region

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3.3 Regional Hegemon: Russia

Russia’s financial contributions to development aid have significantly increased in recent years, showing Moscow’s growing interest in regional and global development cooperation (Zaytsev, 2021; Fig. 2.3). As a matter of fact, after the tumultuous period in the 1990s, the Russian development assistance programme increased from US$100 million in 2004 to a peak of almost US$ 1.3 billion annually by 2016 (Balas et al., 2018).

Fig. 2.3
A bar graph of official development assistance by the Russian Federation from 2005 to 2017 in millions of dollars. The highest value is in 2016 at 1,258.04.

(Source OECD Data https://data.oecd.org/ and the MoF of Russia https://minfin.gov.ru/en/)

Official development assistance provided by the Russian Federation in the period from 2005 to 2017 (US$ millions)

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Even though these amounts are modest in comparison with other donors, they are significant enough, especially taking into account the degree to which the Russian economy is stressed by international sanctions. In this context, the majority of Russia’s development assistance is focused on traditional partners or neighbouring countries. According to OECD, the most relevant Russian recipients are Kyrgyzstan, Tajikistan, Cuba, North Korea, Nicaragua, Guinea, Serbia, Mozambique, Syria, and Armenia. Together, the country-specific programmes focused on these states accounted for 95% of Russian bilateral aid in 2017 (Knobel & Zaytsev, 2017). The Russian commitment in the OSCE area is in line with Moscow’s national objectives in the Eurasian economic space (MoFA RF, 2014) linked with economic integration at the sectoral and country level with Armenia, Belarus, Kazakhstan, and Kyrgyzstan.

The Russian commitment to Central Asia, the Caucasus, and the other CIS countries is also showed by Moscow’s activities in the multilateral environment, where Russia uses multilateral mechanisms through the World Bank or the World Food Programme to increase infrastructure development and the food security, with a special focus on the Kyrgyz Republic, Tajikistan, and Armenia (Zaytsev, 2021). In general, Russia has become one of the largest donors in the case of many post-Soviet countries (The volume of Russian assistance, 2018). Like that of other emerging donors, Russian bilateral aid is mainly focused on economic and social growth, with a special focus on rural infrastructure and development, food security, health, and water and sanitation.

3.4 Comparing Donor Policies

There is an unquestionable impact of development aid provided by China, Russia, EU institutions, European countries, and the US from 2012 to 2019 within the OSCE. While they all focus on economic and social development in general, they have very different target areas and groups, such as in Albania, Bosnia and Herzegovina, Montenegro, North Macedonia, Serbia, Armenia, Azerbaijan, Georgia, Ukraine, Moldova, Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan, and Uzbekistan. According to the literature, development aid sent by traditional donors should promote the democratic process in the OSCE’s recipient countries. Thus, the recipient countries of the emerging donors should have higher corruption rates than the beneficiary countries of traditional providers, taking into account the possibility of misuse of aid by local institutions. At the same time, the OSCE recipient countries mainly supported by Russia and China should show higher economic growth than those countries supported by traditional donors in the period considered. This outcome should confirm the hypothesis by which emerging donors may have a better understanding of recipient needs thanks to their recent past as beneficiary countries.

4 Methodological Framework

The study calculates the impact of aid provided by two emerging and two traditional donors on 15 recipient countries coming from four different OSCE’s areas: the Western Balkans (5 countries), Eastern Europe (2), the Caucasus (3), and Central Asia (5). Following a positivist approach, the hypotheses are tested taking into account quantitative data provided by different international organizations (such as the OECDFootnote 2 and the IMFFootnote 3) and think tank data sets (such as Freedom house,Footnote 4 AidData Footnote 5 and Transparency InternationalFootnote 6). This data will be used in order to calculate (a) the main donor (emerging or traditional) of the OSCE’s recipient country considered; (b) the democratic progress of the beneficiary states; (c) their economic growth and (d) their corruption level. The study covers the time range from 2012 to 2019. The study caps the time frame at 2019 because recipient and donor countries have since been impacted by the COVID-19 pandemic.

4.1 Tracking Development Aid in the OSCE

To identify the top donor for each beneficiary state, it is relevant to track the aid provided by providers. In relation to the DAC donors considered, this study uses data provided by the foreign aid database available from OECD Statistics. This data set shows the most comprehensive data for the traditional donor ODA. Even though the OECD Statistics also provided data concerning aid coming from emerging donors such as Russia, it is necessary to verify the data against that from other tools used to track development aid coming from new providers. As a matter of fact, the OECD data set does not provide details concerning project-level data on outgoing Russian aid flows and does not furnish any data related to China (Strange et al., 2017). Beijing does not participate in any international reporting systems such as those run by the OECD DAC due to China’s distinct approach to development finance as more focused on “a form of mutual assistance between developing countries” (Johnson & Zuhr, 2021). Thus, studies in the literature have created different systems in order to track the Chinese aid. This analysis builds on the methodology and data collected by the JICA Ogata Sadako Research InstituteFootnote 7 which provides the most detailed estimate on China’s development aid based on DAC standards. Moreover, in order to confirm data on emerging donor development aid trends, this investigation uses the statistics provided by AidData. Similarly, to the OECD Statistics, AidData provides a cross-sectional, time-series data set furnishing statistics also related with emerging donors. The reliability of the database is also confirmed by the considerable amount of development aid quantitative analysis based on the AidData project (Donner et al., 2016; Dreher et al., 2018; Tierney et al., 2011). Using these data sets, the research can identify which are the top donors among China, Russia (as emerging), the EU and the US (as traditional) for the 15 recipient countries previously mentioned (Table 2.1).

Table 2.1 Top donors of the recipient countries considered in the OSCE region
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4.2 Measuring the Democratic Progress of OSCE Recipient Countries

In recent decades, academia has provided different methodologies for analysing the democracy levels of countries. These include Polity IV, the Democracy Index of the Economist Intelligence Unit, and the Freedom House ratings. This study will be based on the democratic quantification offered by the Freedom House ratings which highlight the importance of political rights, civil liberties, and the rule of law in a country (Schmidt, 2015).

Despite some criticism (Munck & Verkuilen, 2002) related to rating shortcomings and the use of a system based on intuitive observation, scholars have determined the Freedom House method to be accurate and replicable in other investigations focused on measuring democracy.

Using the Freedom House 2012 and 2019 scores for the 15 recipient countries considered, this research calculates democratic progress as follows:

$${\text{Dp}} = {\text{recipient}}\; \times \;{2}0{19}\;{\text{Ds}} - {\text{recipient}}\; \times \;{2}0{12}\;{\text{Ds}}$$

where Dp represents the democratic progress from 2012 to 2019, and Ds the Democratic score provided by Freedom House for the years 2009 and 2012.

The higher the Dp value, the more the recipient country considered has democratic progress for the period considered. Differently, a negative Dp value shows how the country considered in 2019 is less democratic than it was in 2012 (Table 2.2).

Table 2.2 Democratic score of the recipient countries considered in the OSCE’s region
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4.3 Measuring Economic Growth

As suggested by different investigations (Ahmed et al., 2007; Lucic et al., 2016), even though the Gross Domestic Product (GDP) is not the only index to consider measuring a country’s economic condition and population wealth, it may be a relevant indicator for estimating the economic progress of a recipient country, in particular in order to understand how development aid has impacted democratic progress. Therefore, economic progress is measured in this article by considering the average growth of the Gross Domestic Product (annual per cent change) and the GDP per capita in the period between 2009 and 2019 based upon the IMF and WB databases (Table 2.3). Given the negative impact of the COVID-19 pandemic on economic growth in the last two years, the study is focused only on the decade before the outbreak.

Table 2.3 Economic progress of OSCE recipient countries, 2012–2019, in bold data related to the average GDP growth, GDP per capita difference and relative change
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4.4 Measuring Corruption

This research takes into account the Corruption Perception Index (CPI) provided by the Transparency International database https://www.transparency.org/en/cpi/2019/index/nzl. Outcomes coming from recent studies have raised a debate on how foreign aid has been misused and embezzled by local authorities (Andersen et al., 2022; Barrett et al., 2020). CPI data were previously used in other studies (Gyimah-Brempong, 2002; Nageri et al., 2013) to show that corruption impacts democratic progress and the economic development in recipient countries, affecting the general development of a country, generating political instability and institutional inefficiency, and decelerating the growth rate and the productivity (Lambsdorff, 2003; Mo, 2001).

In this context, Transparency International collects and aggregates data coming from different sources which provides the perceptions of country experts and business people on the level of corruption in the public sector. The Transparency International information points to a scale of 0–100, where 0 is the highest level of perceived corruption and 100 the lowest one. Therefore, if a country receives a score of close to 100, the level of perceived corruption is low. Conversely, a country ranked with a low score shows a high degree of perceived corruption.

The Transparency Index 2012 and 2019 scores for the 15 recipient country are considered in the following Corruption Perception Index (Table 2.4) calculation used in this study:

$${\text{CPI}}\;{\text{score}}\; = \;{\text{recipient}} \times {2}0{19}\;{\text{CPI}} - {\text{recipient}} \times {2}0{12}\,{\text{CPI}}$$
Table 2.4 Corruption perception Index score of the recipient countries considered from the OSCE region
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5 Principal Outcomes

Taking into account the data collected and the tables previously shown, it was possible to analyse recipient country performance in the mentioned sectors.

As shown in Table 2.1 concerning the top donors of the 15 recipient countries of the OSCE, the EU institutions and the EU members can be seen to be the most relevant donors in different OSCE regions. This may be explained by the high numbers of EU programmes in support of the EU’s neighbours (under the European Neighbourhood Policy) and to help countries prepare for EU membership. China and Russia, by contrast, are the most important donors in Central Asia, where the influence of Moscow and Beijing is still strong as is shown by the workings of the Belt and Road Initiative, the Shanghai Cooperation Organization, and the Collective Security Treaty Organization.

Aggregating data coming from Tables 2.1 and 2.2 related to the democratic performance of recipient countries, it seems relevant to stress the negative scores in all OSCE areas. If this result could be expected in those recipient countries supported by emerging donors (such as Tajikistan, Kazakhstan, or Turkmenistan), the outcome is surprising if we consider the beneficiary countries which receive more aid from traditional donors (all the recipient countries in Eastern Europe, the Western Balkans, and the Caucasus) as they show no positive relationship between the amount of aid allocated and democratic progress. These results seem to suggest the ineffectiveness of the aid conditionality approach carried out by traditional donors who send their financial support after taking into account criteria other than the democratic openness of the local institutions of beneficiary countries (such as their geopolitical goals).

With regard to economic growth, it is possible to identify a positive relationship between development aid and economic growth in all the recipient countries considered (as shown in Table 2.3). The Internal crisis has slowed down the progress of Ukraine, which is the only recipient country to show negative results. Central Asian countries (particularly Tajikistan, Turkmenistan, and Uzbekistan), mainly supported by China and Russia, have been the top economic performers during the period considered. This data shows how aid coming from new providers is considerably more efficient, likely due to the recent past of these donors as recipients. By contrast, economic growth in the regions financed by traditional donors (such as the Western Balkans or Caucasus) is lower than that in the Central Asian countries.

This difference may be explained by various factors. Firstly, the Western Balkans and Caucasus have already reached a good level of development; therefore, their current economic growth is less significant than that of the Central Asian countries. At the same time, aid directed by emerging donors may prove to be more efficient in terms of economic progress, as Russia and China are more aware of beneficiary needs due to their recent past.

Other interesting results concern the relationship between development aid and corruption as shown in Table 2.4. Beyond the exception of two Western Balkan countries (Bosnia Herzegovina and North Macedonia) and Moldova, it is possible to see a general improvement against corruption. In particular, countries mainly financed by emerging donors (such as the Central Asian states) show a general improvement on the Corruption Perception Index, proving to be less corrupt than before. While the corruption levels in these countries remain higher than in other OSCE areas where CPI have negative or less progress in the period considered, it is important to stress the lack of inverse correlation between emerging foreign assistance and increased corruption.

The next paragraph analyses in a critical way the findings of the statistics collected taking into account the aforementioned outcomes and using these to create a unique data set by aggregating the data (Table 2.5). It uses this analysis to explain possible relationships between emerging versus traditional donor aid and OSCE recipient countries.

Table 2.5 Data set merging OSCE recipient country main donors (traditional or emerging), Democratic Progress and Corruption Indices, and their Economic Development Indicators
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6 Main Findings

Using data from the aforementioned database, it is possible to identify a non-significant correlation between development aid and the democratic process in recipient countries considered (the correlation among the two variables, development aid, and democratic progress is −0.135). As a matter of fact, only four states (Albania, Armenia, Georgia, and Uzbekistan) of the fifteen analysed have positive scores. In particular, it seems relevant to stress the insignificant link between democratic progress and aid sent by traditional donors, such as the European Union, which allocate their assistance through aid conditionality in order to support democracy building in recipient countries. A clear example of this is in the Western Balkan region where EU institutions are providing external incentives such as European Union membership or assistance in exchange for political and legal transformation (Zhelyazkova et al., 2019). The lack of relationship between aid receipt and democratic progress in the region may be explained by two factors. Firstly, traditional donor aid focused on building democratic processes is not effective due to local background elements; for example, the corruption levels in the Western Balkan countries are still high despite a slight improvement in some countries, as is shown in Table 2.4. Secondly, as stressed by other studies, traditional donor aid allocation is strongly influenced by their own geopolitical and national needs (Alesina & Dollar, 2000). Thus, the EU and other Western countries allocate their financial assistance to the Western Balkans, Caucasus, and Eastern Europe more to share their influence in these strategic regions than with the goal of recipient country improvement (Berthelemy, 2006).

As expected, recipient countries financed by emerging donors (with the exception of Uzbekistan) have negative democratic scores as Chinese and Russian aid is more focused on economic development. With regard to the expectation, those recipient countries mainly financed by China and Russia will show higher economic growth, the annual percentage growth of GDP of Central Asian countries seems to confirm this trend. This may validate the theory concerning the higher efficiency of aid provided by emerging donors in accelerating a recipient country’s economic progress due to being more aware of beneficiary needs based on their own recent past. Furthermore, new providers are more focused on allocating financial assistance to sectors which promote economic progress than are the traditional donors (Woods, 2008). Therefore, development aid, especially that coming from emerging donors, may be considered to be an economic growth accelerator which can affect economic trends positively in recipient countries.

Starting from this data, further investigation should be carried out the relationships between development aid, economic growth, and the benefits for all population categories of the recipient countries in the OSCE area. In addition, the emerging donor development aid economic growth model has been criticized due to resource exploitation that can occur and the unsustainability of the approach (Manning, 2006). Considering this, it may be interesting for further research to analyse whether traditional and emerging assistance provides the same positive (or negative) economic outcomes to different parts of society in recipient countries. Finally, future analysis should analyse the environmental impacts of economic growth, in particular in recipient countries assisted by the emerging providers.

Other interesting results concern the third main topic on the relationship between development aid and corruption. With the exceptions of Bosnia Herzegovina, North Macedonia (which had good scores in 2012 according to the Corruption Perception Index) and Moldova, the corruption levels in all recipient countries decreased in the period under study.

Among the beneficiaries, one of the top performers is Armenia, with a CPI score of 42 and an improvement of 8 points since 2012. This result was also affected by local anti-corruption reforms usually supported by traditional donors, in particular the US (Galstyan, 2018). Another interesting result is related to the positive performance of Central Asian recipient countries which are mainly financed by emerging donors (Uzbekistan + 8; Kazakhstan + 6; Kyrgyzstan + 6). Although the corruption scores in these countries remain high, the positive trends are particularly relevant as it would seem to indicate that development aid provided by emerging donors does not increase corruption in the OSCE area as in other areas such as Africa or Latin America. These results may be explained by considering the multiple OSCE anti-corruption programmes launched in the different OSCE areas considered in order to increase cooperation with local and national institutions, including assistance on corruption prevention measures, anti-money laundering, and countering terrorism. This could have had a higher impact in those countries with more elevated corruption levels (indicated with lower CPI scores in the data set) such as the Central Asian or Caucasus states (Georgia excluded).

7 Conclusion

Using a positive approach based on quantitative data provided by international organizations and think tanks, the following paper has empirically tested the impacts of aid coming from emerging (China and Russia) and traditional donors (Western Countries and the EU) in four different OSCE areas: the Western Balkans, Eastern Europe, the Caucasus, and Central Asia. As assumed, there is no clear relationship between aid and democratic progress. While this result was expected in relation to the recipient countries mainly financed by emerging donors, this outcome is more surprising in terms of aid sent by traditional providers. Beyond allocating their assistance on projects concerning the institution building, traditional donors have usually shown their intention to send “conditional” aid based upon a recipient country’s commitment in terms of improving their democratic processes. The result thus seems to contradict the utility and effectiveness of the aid conditionality approach of the traditional donors, possibly because where they send their financial support is also based upon their own geopolitical goals.

Regarding economic progress, the existence of a positive relationship between development aid and economic growth was confirmed by the results, as all the recipient countries showed a high percentage growth rate. The only exception concerns Ukraine, which suffered a slowdown during the internal and international crises from 2013 to 2015. Among the regions considered, higher economic development values are shown by the Central Asian countries, which are mainly financed by emerging donors. This confirms the hypothesis that aid coming from new providers is considerably more efficient, potentially due to their recent past of these donors as recipients.

In this preliminary assessment, I could not find a considerable relationship between aid receipt and corruption, as the majority of the recipient countries considered showed a general improvement in this area. This goes against the trend in other areas where aid, in particular that provided by emerging donors, has a positive relation with corruption level. This may be also explained by the activities of of international or intergovernmental organizations, such as the OSCE, which launch several projects in terms of mitigating and fighting corruption in the mentioned countries. For example, in Uzbekistan and in Kyrgyzstan, the OSCE supports local agencies in enhancing good governance and fighting corruption.

Even though there remain several aspects for suture investigations to analyse, such as in what way development may facilitate the democratic process, in what way it might accelerate the fight against corruption, and whether foreign assistance can benefit all population categories, the findings of this study can provide useful tools and inputs for the OSCE and its member countries. Taking into consideration the different qualities of the donors discussed, the various peculiarities of the regions analysed, and knowledge of the OSCE missions deployed on the field, the OSCE can design specific projects and programmes involving recipient institutions and various traditional/emerging beneficiaries in order to facilitate sustainable, inclusive economic growth and greater democratic progress.