Foreign Aid and Its Political Effects

For the last few decades Somalia is deemed to be the ultimate fragile state. Civil war in the region almost ruined any of Somalia political institutions. Western countries try their best at fixing this situation using different political tools such as military interventions or official development assistance. Nevertheless, foreign aid effects are not so obvious, as it did not result in stability and political development in the region. Meanwhile, a region of Somalia, Somaliland exists, being the safest territory in post-conflict state, while being unrecognized state, which means it has no access to foreign aid. Somaliland has no visible safety problem, has functioning state institutions and holds elections, which are described as fair and free. Following study focuses on Somalia and Somaliland. We perform an analysis of influence of foreign aid onto stabilization of political institutions within Somalia, while Somaliland is being taken as an ‘alternative path’. Main results of this study is the observation of influence of foreign aid distribution and allocation within state, influence of military conflicts on stabilizing effect of foreign aid and foreign aid influence on government legitimacy.