Foreign Aid 1

Jeremy Springman

University of Pennsylvania

Global Development: Intermediate Topics in Politics, Policy, and Data

PSCI 3200 - Spring 2024

Logistics

Assignments and Upcoming

  • Today
  • Thursday (4/4)
    • Foreign aid readings
    • Review of Data Assignment 1
  • April 11
    • Final project proposal

Agenda


  1. Overview of Foreign Aid
  2. Briggs (2016)
  3. Briggs (2021)
  4. Final Project Assignment 2

Overview of Foreign Aid

Aid Disbursements

Aid Disbursements

Aid Received

Aid Received

Aid Received

Aid Received

Aid Distribution

Debates Around Aid

  • Economic growth
  • Welfare
  • State capacity
  • Poverty alleviation
  • Accountability

Debates Around Aid

  • Budget support vs Project Aid
    • Governments have information advantages
    • Government budgets are subject to massive leakage (Reinikka & Svensson, 2004)
  • Accountability
    • Fungibility
    • Donor vs recipient control

Aid Distribution

Briggs (2016)

Research Question


Is development aid targeted to the poorest citizens?

  • Donors have a stated preference for using aid to alleviate extreme poverty
  • Pressure may undermine this targeting
    • Donor foreign policy objectives
    • Donor ignorance
    • Recipient politics

Theory


Why is it easier for multilateral donors to send aid to poorer countries?

  • Multiple stakeholders mean aid must flow to places where preferences overlap
  • Donor preferences are likely to overlap in the places with the greatest need

Case Selection

Most likely scenario for effective targeting:

  • Commitments rather than disbursements
  • Multilateral donors
  • Project aid

Project aid must be proximate

  • Aid is typically providing local public goods

Measurement

  • DV: Aid projects per region
    • World Bank and ADB 2009-2010
    • Each region’s share (with and without cost weights)
    • Total dollar value
  • IV: Wealth quintiles
    • DHS 1999-2008
    • Relative wealth composition of each region (% of each quintile living in each region)

Research Design


  • Unit Fixed Effects
  • Lagged IV \(\rightarrow\) DV
  • Control for obvious pre-treatment confounders

Measurement


Measurement


Findings

Findings

Briggs (2021)

Research Design

Conjoint survey experiment

  • Sample: World Bank Task Team Leaders
  • Task: select projects based on important characteristics
  • Outcomes: Client desirability, WB approval, implementation, impact

Research Question

What pressures shape the distribution of aid?

  • Which projects the client government would prefer
  • Which projects would be easier to get WB approval
  • Which projects would be easier to implement
  • Which projects would get better internal ratings
  • Which project would be better for development

Findings

Findings

Findings

Client government desireability

  • Positive: Hometown of the recipient country’s President
  • Positive: Government implemented
  • Neutral: Income of project location, urban

Ease of approval

  • Positive: poorer places was easier to get approved
  • Negative: presidential hometowns
  • Negative: projects with smaller budgets

Findings

Development impact

  • Positive: Poorer and rural areas

Ease of implementation

  • Negative: Poorer and remote projects
  • Getting more projects approved was either extremely or very important to their career

Findings

Findings

Findings

Findings

jrspringman.github.io/psci3200-globaldev/