This paper analyzes the conditions under which foreign aid fosters or obstructs democratization in post-conflict countries governed by power-sharing arrangements. I argue that foreign aid can obstruct democratic development. If members of the power-sharing coalition need to rely on foreign aid to—at least in part—secure their own political survival by distributing private benefits to their support groups, post-conflict democratization becomes less likely; rebels’ seats in the power-sharing coalition become economically too valuable for them to accept an uncertain democratic competition over these very seats. I test this argument statistically using data from the AidData project and new data on rebel participation in power-sharing coalitions between 1990 and 2011 for a set of 41 post-conflict countries.
