By Axel Dreher, Professor of International and Development Politics, Heidelberg University, Valentin Lang,Post-Doctoral Researcher in Political Economy, University of Zurich, B. Peter Rosendorff, Professor of Politics, New York University and James Vreeland, Professor of Politics and International Affairs, Princeton University. Originally published at VoxEU
Countries that vote with the US when serving on the UN Security Council also receive more financial assistance. This column uses voting records in the Council to show that when these countries were US allies, they received more in US aid, but when the countries were not natural allies, they received more financial assistance from US-dominated international institutions instead.
On 18 December 2017, the US vetoed a United Nations Security Council resolution that had called for the withdrawal of US President Donald Trump’s recognition of Jerusalem as the capital of Israel. The resolution was supported by all remaining 14 members of the Council. Two days after the vote, Trump threatened to cut foreign aid to countries that voted against the US at the UN. “These nations that take our money and then they vote against us at the Security Council … We’re watching those votes. Let them vote against us, we’ll save a lot,” he said.
The Trump administration is not the first to pay attention to these votes. When Hillary Clinton, at that time the US Secretary of State, paid a visit to Togo in 2012, the press questioned her choice of destination. Clinton explained that, “[n]o secretary of state had ever been to Togo before. Togo happens to be on the UN Security Council. Going there, making the personal investment, has a real strategic purpose … When you look at … the voting dynamics in key international institutions, you start to understand the value of paying attention to these places.”
Several years earlier, the first Bush administration famously pressured governments to vote in favour of the Security Council resolution approving Operation Desert Storm. When Yemen voted ‘no’, James Baker, the Secretary of State, reportedly told colleagues, “[t]hat’s the most expensive vote they ever cast.” The US subsequently cut $70 million in foreign aid.
These anecdotes reflect a systematic pattern. In previous research, we and others have found that countries that serve on the UN Security Council get financial favours. They receive more US aid and more loans from international institutions in which the US commands a powerful voice, including the IMF, the World Bank, and UN aid agencies. Countries also receive softer IMF conditionality during their two years of temporary membership (Kuziemko and Werker 2006, Vreeland and Dreher 2014, Dreher et al. 2015).
Linking Voting Behaviour to Favours
In recent research (Dreher et al. 2018) we asked whether these favours are linked to voting behaviour in the Security Council, what the rewards might be for voting with the US, and the method by which the US could ‘buy’ agreement, given that it would be frowned upon if done openly. To answer the questions, we used an original dataset that comprehensively records Security Council voting data.
We estimate that countries that voted with the US in the Security Council also got an increase in US aid of about 40%. Those members that voted against the US, on the other hand, got no more aid while serving on the Council than countries outside the Council.
Figure 1 UN Security Council decisions over time
Source: Dreher et al. (2018).
This pattern of increased aid is only observable for US allies (see Figure 2). While the US government would not be criticised for giving aid to allies, it might be politically costly to an administration to openly reward non-allies in ways that the US Congress and public could see.
Figure 2 UN Security Council voting and US aid allocation
Source: Dreher et al. (2018).
Notes: The figure shows the marginal effect of serving on the UN Security Council while voting all the time with the US on bilateral US aid flows for different levels of political proximity to the US (in concert with the 90% confidence interval). The histogram shows the distribution of political proximity to the US among aid-eligible countries, measured as voting alignment in the UN General Assembly.
These payments may be seen as improper. Also, an increase in foreign aid following a vote at the Security Council might damage the legitimacy of the UN, when this legitimacy a key reason for governments to seek Security Council support in the first place. The US public might also frown upon providing aid to a country not viewed as a friend of the US.
An historical example suggests that these risks do not entirely prevent the US from buying support from countries of this type. After the collapse of the Soviet Union, the US attempted to influence political developments in Russia with billions in bilateral aid in the early 1990s. In the mid-1990s, these aid packages came under increasing popular pressure in the US because of concerns over the budget deficit, and an unpromising outcome (for US interests) in Russian parliamentary elections.
This led to large reductions in US aid in the late 1990s. But when the US turned away from using direct bilateral aid, it started using obfuscated sources of funding. In 1995, the IMF approved a $6 billion loan program. It increased it to more than $10 billion the next year, and to the extraordinary figure of $18 billion in 1998. It is now clear that the US put pressure on the IMF behind the scenes. Boris Yeltsin, the Russian President at the time, said that to get the IMF to commit to these loans “[w]e had to involve [Bill] Clinton, Jacques Chirac, Helmut Kohl, and [John] Major” (Gordon 1996). Apparently, the US exploited its influence on the IMF to provide multilateral financial support when it had become difficult and politically costly to give bilateral aid.
We find systematic evidence that this pattern held when looking at UN Security Council voting data. While allies received increased bilateral aid from the US when they voted for the US position, governments not allied with the US did not. Instead, when these governments voted with the US, there were increases in loans to them from the IMF. Our results suggest that these countries received an increase in IMF loans of about 50%.
Figure 3 UN Security Council voting and IMF loan allocation
Source: Dreher et al. (2018).
Notes: The figure shows the marginal effect of serving on the UN Security Council while voting all the time with the US on IMF loan size for different levels of political proximity to the US (in concert with the 90% confidence interval). The histogram shows the distribution of political proximity to the US among aid-eligible countries, measured as voting alignment in the UN General Assembly.
It may be no surprise to find that powerful countries would be willing to buy influence. Realpolitikhowever, has required different channels for different countries. We see that the practice of buying influence around the world, while perhaps crude, has been nuanced and finessed by obscuring the funding sources. The US may have openly funded its allies, but it hid similar favours to less friendly states. Ironically, the international institutions that the US used for this obfuscation are the same institutions that the Trump administration is currently weakening in its attempt to put American interests first.
See original post for references