Carrots or Sticks: The Choice and Impact of EU Democratic Sanctions and Aid

Both the provision of democracy aid and the imposition of sanctions are tools to promote
democracy. Yet, it is unclear under which conditions states choose to set positive or negative
incentives. In order to answer which tool—democracy aid or democratic sanctions—is more
effective, one has to analyse the actual form of the provision of aid. Sanctions and democracy aid
can also be employed at the same time. The goal of this study is to determine their joint effect on
democratization in recipient countries. We argue that sending civil society aid or democracy aid
channeled through NGOs and the civil society when sanctions are in place, enhances the
effectiveness of sanctions as a democracy promotion tool because the civil society can be
empowered to introduce democratic changes in its country—so additionally to the top-down
pressure created by sanctions, there is bottom-up pressure exerted by the civil society. Our results
suggest that democratic sanctions are more likely to be successful if democracy aid bypasses the
government in a target state. Conversely, other forms of aid provision tend to decrease the
effectiveness of sanctions. In order to precisely explain the joint impact of positive and negative
incentives on democratization, we employ a new comprehensive dataset on economic sanctions
for the period between 1989 and 2015 which integrates and updates the Threats and Imposition of
Economic Sanctions and the GIGA sanctions data sets, merged with disaggregated OECD aid data
and V-Dem as well as PolityIV democracy scores.