Recent literature has proliferated with studies both questioning the effectiveness of foreign aid, and asking if foreign aid can engender negative effects through a “curse” of aid, or “aid-dependent” relationships. This latter term, while widely used, is surprisingly under-developed conceptually. The paper reviews previous usage and implicit understandings of aid-dependence as causing geo-strategic domination, institutional frustration, and/or marco-economic distortion and finds that aid dependence has generally been understood as some “large” threshold of aid. To more concretely conceptualize the term, the paper draws on the welfare dependence literature to suggest a different understanding of aid dependence based on aid persistence. Specifically, the paper defines aid dependence as the duration of non-declining aid receipt. Using panel logistic techniques, the paper finds evidence that when aid-dependence is conceptualized this way, it is associated with negative macroeconomic and public health shocks. These findings suggest that more useful understandings of the impacts of aid-dependence may be predicated on how long a country has been receiving aid as opposed to how much aid they receive.
