The Budding Ripple Effect featuring Foreign Aid and Human Trafficking

Foreign aid is one of the most powerful tools at a singe state’s disposal. Economically, it can provide much needed support to the poorest of countries or those facing catastrophic conditions. Politically, it can strengthen the current government’s position and provide them with what they deem necessary to keeping their rule of law, whether they be democracies or autocracies. In addition to these effects, a donor state must also balance their own interests, which can sometimes conflict with a recipient. An alternative route that can potentially help a donor avoid such dilemmas is to divert funds through a multilateral organization instead, which can help donors avoid the need to go through another state government. Regardless of the method of disbursement though, the use of financial foreign aid has a tendency to produce effects that go far beyond its initial goal. This tendency is what this study seeks to examine. Within this context, this study seeks to empirically investigate the unintended impact that foreign aid may have on one of the world’s biggest human rights abuse: human trafficking. Human trafficking is a generations-old problem still in search of a solution. In two parts, I use an ordinal logistic regression to examine historical data in a post-Cold War era to determine the extent of foreign aid’s unintended impact on a crime yet undefined. In the first part, total financial foreign aid is examined for general impact. In the second part, financial foreign aid is split into its most common forms, bilateral aid and multilateral aid, to examine specific individualized impacts. Overall, my study reveals that there is indeed an impact on human trafficking, even though it had yet to be clearly defined at the time . In addition to that, bilateral aid experienced more statistical significance as compared to multilateral aid, suggesting that bilateral aid may have had a bigger part to play in the realm of human trafficking. The magnitude and type of relationship that foreign aid has with human trafficking appears to change over time. However, this study does have its limitations, which make the interpretation of the results a cautious act. With these facts in mind, policymakers are faced with a multi-faceted dilemma in need of fine-tuning.