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In an era of democratic backsliding, democracy aid is increasingly turned to as a key instrument for promoting democracy and democratization. Yet in a time when democracy aid already amounts to over ten billion dollars a year worldwide, there is still substantial variation in observed effects across societies. To increase our understanding of the sources of this variation, building on the literature on the sequencing debate, this paper investigates the role of state capacity in channeling the effects of democracy aid. More specifically, we develop and test the argument that state capacity, understood in coercive, administrative, and ideational terms, affects the incentives and opportunities of both elites and citizens to implement and use democracy aid for the purpose of democratization. We conduct a time-series cross-sectional analysis, covering the period from 2002 until today, and investigate the way in which different dimensions of state capacity influence the impact of democracy aid.

Exploring how the future might evolve through feasible development pathways is crucial for designing evidence-based policies that steer societies away from current trajectories of environmental crisis. Political institutions directly shape these policies and determine the potential scope of action. While state-of-the-art Integrated Assessment Modelling (IAM) of climate and sustainable development acknowledges the importance of socio-political factors, they remain underrepresented in quantitative modelling efforts. Consequently, it is largely unclear which implicit trajectories of institutional development are consistent with widely used scenarios, such as the Shared Socioeconomic Pathways (SSPs). We address this gap by introducing an updated modelling approach to project the strength and quality of political institutions across 164 countries until 2100, aligned with the SSPs. Methodologically, we operationalize these characteristics using V-Dem’s “Equality Before the Law and Individual Liberty” and “Accountability” indices. Our preliminary results indicate that the “Green Growth” (SSP1) and “Fossil-fuelled Development” (SSP5) scenarios are associated with substantial institutional improvements across most world regions. Moderate improvements are projected under the “Middle of the Road” (SSP2) scenario, while institutional strength and quality largely stagnate under the “Regional Rivalry” (SSP3) and “Inequality” (SSP4) pathways. Finally, we discuss the implications of our modelling results and address structural limitations.