Foreign Aid 1
Logistics
Assignments and Upcoming
- Today
- Thursday (4/4)
- Foreign aid readings
- Review of Data Assignment 1
- April 11
- Final project proposal
Agenda
- Overview of Foreign Aid
- Briggs (2016)
- Briggs (2021)
- 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
