THIS SOUNDS GOOD TO ME:

The 2003 Nobel Peace laureate, Iranian lawyer Shirin Ebadi, called on the world community to stop giving financial assistance to governments and regimes that are not democratic. Ms. Ebadi made her comments Monday in a speech at the World Bank Headquarters in Washington. . . .

Ms. Ebadi pushed for the need to promote human rights and democracy alongside economic development. Without singling out any specific countries for criticism, she made it clear that financial aid to countries she described as “undemocratic,” only helps prop up repressive regimes.

“In countries that are undemocratic, where their governments are undemocratic, and where all the administrative, political and economic power of the society lies in the hands of one person or a special group or elites of a country, the granting of loans means assisting dictators and opposing people who are already oppressed,” said Ms. Ebadi. “In other words, to say it more clearly, if undemocratic countries receive loans and credits, they are strengthened to become more negligent of the rights of their people.”

Yes.

UPDATE: Here’s a related post by Gopi Sundaram from a couple of months ago — though it’s about trade, not aid, which is taking things considerably farther.

ANOTHER UPDATE: Sissy Willis notes that the Bush Administration has something like this in mind.