Foreign Aid 2

Final Project Essentials: Fixed Effects

Author
Affiliation

Jeremy Springman

University of Pennsylvania

Logistics

Assignments

Agenda


  1. Cruz (2016)
  2. Bold et al. (2018)
  3. Review of Data Assignment 1

Cruz (2016)

Foreign Aid and Accountability


Standard channels for political manipulation

  • Distribution of aid: Divert resources from needy to strategically valuable communities (clientelism)
  • Reallocation of budgets: Divert resources from development (fungibility)

Foreign Aid and Accountability


Donor strategies to avoid manipulation:

  • Project aid
  • Channel through NGOs or direct transfers
  • Generally cut government actors out of the process

Three Questions

Three questions

  1. Do citizens perceive foreign aid projects?
  2. How do politicians claim credit?
  3. Under what conditions are they successful?

Sources of updating

  • Credit for welfare improvement
  • More likely to secure future projects

Research Design


  • Research question: Can local politicians claim undue credit for the aid projects to boost their re-election prospects
  • Allocation of projects: Eligibility determined by poverty threshold
  • Least likely design for credit misattribution:
    • Low chance for political influence on distribution
    • Minimal ability to reallocate budget in response

Undeserved Credit Claiming

  • What is undeserved credit claiming?
    • Politicians claiming credit for projects they had no role in securing
  • Mechanism:
    • Exploiting the lack of transparency and information among voters
  • Implications:
    • Undermines incentives to improve welfare

Findings

  • Election impact: 12% increase in re-election chances
  • Increased visits: Politicians visited project sites more frequently to appear involved
  • Political credit: Mayors are credited for funding or initiating projects even when respondents knew of other funding sources

Policy Implications


  • Designing Aid Projects: Importance of transparency and community involvement to minimize undeserved credit claiming
  • Voter Education: Enhancing voters’ understanding of aid processes to better hold politicians accountable
  • Involvement: Giving opportunities to contribute makes credit deserved

Brief History of Non-State Service Provision

Service Delivery & The State

What do states do? (Hoffman, 2015)

  • Monopolize violence
  • Levy taxes
  • Obtain the assent of the population

Why is public service delivery (PSD) important?

  • Promotes economic growth
  • Improves welfare of citizens

The Social Contract

Mutual reliance between states and citizens

  • States need tax revenue
  • Citizens need public services
    • Provision of clean water accounts for 60% of the increase in life expectancy in the United States between 1850 and 1950 (Troesken 2001).

The Social Contract

Virtuous cycle between taxation, PSD, and state capacity

  • Taxation \(\Rightarrow\) citizen demand for PSD
  • Government PSD \(\Rightarrow\) citizen compliance with taxation
  • Citizen compliance with taxation \(\Rightarrow\) increased state capacity
  • Citizen reliance on PSD \(\Rightarrow\) political accountability (Hoffman and Gibson 2005)

The Fiscal Exchange

How does this work in social contexts without direct taxation?

  • Compliance obtains when people expect that services will be delivered
  • Compliance is conditional

Norm-driven social contract emergence

  • Tax morale and civic duty
  • Compliance is internalized

Historical Service Delivery in Africa

Service delivery in the pre-colonial period

  • Pre-colonial African states did not engage in extensive service delivery (Herbst 2000)
    • States weren’t geographically bounded
  • Christian missions were (kinda) the first service providers
    • Emphasis on literacy and formalizing indigenous languages
    • Competing with traditional healers (Chirwa 2016)

Historical Service Delivery in Africa

Colonial approaches to service delivery

  • Traditional medicine was outlawed (Chirwa 2016)
  • The church is “cemented” as the primary service provider (Jennings 2014)
    • Tanzania at the end of the colonial period
    • Church operated 81% of primary health facilities
    • Church-operated schools outnumbered government schools 4-to-1

Historical Service Delivery in Africa

Historical Service Delivery in Africa

Historical Service Delivery in Africa

Post-colonial period

  • Post-colonial African states nationalized service delivery infrastructure and increased spending (Bates 1981)
    • Kenya’s Civil Services (Young 1988)
    • 1945: 14,000; 1955: 45,000; 1978: 170,000
  • Commodity boom \(\Rightarrow\) commodity bust
  • Structural adjustment: Kenya’s Health Spending (J. Brass 2014)
    • 1980: $9.8 million; 1993: 6.2 million; 1996: 3.6 million

The Re-Entry of Non-State Providers


In 2007, 9% and 16% of US economic engagement with developing countries has been Official Development Assistance and private philanthropy respectively (Kapur and Whittle 2009).

The Re-Entry of Non-State Providers

The Re-Entry of Non-State Providers

Faith Based Organizations (FBOs) (Green et al. 2002)

  • Church “umbrella” organizations (ex. Uganda Protestant Medical Bureau)
  • International religious FBOs (ex. World Vision)
    • Operate more like secular NGOs

The Re-Entry of Non-State Providers

Malawi: Number of health facilities

Year Gov FBO NGO
2005 426 160 32
2008 545 167 70
2013 478 167 57

The Re-Entry of Non-State Providers

Kenya: Number of health facilities

Year Gov FBO NGO
2007 2,445 1,060 83
2012 4,043 998 218
2014 4,637 1,071 346

Regions

Non-governmental Organizations

What are NGOs?

  • Private, non-profit organizations that aim to improve societal well-being through service delivery
  • Provide free services, strengthen existing social infrastructure
  • Receive most of their funding from foreign aid contracts (Fafchamps and Owens 2009; J. N. Brass 2012)
  • Marie Stopes Uganda: Provided 75% of the Intrauterine Devices distributed in Uganda between 2006 and 2011

Non-governmental Organizations

Who do NGOs serve?

  • Target needy communities
  • Target convenient communities
  • “Pragmatic saints” (J. N. Brass 2012)

Citizen Attitudes on NGOs

  • Kenya: 70% of respondents said NGOs “have the interests of the people in mind” (34% for government) (J. Brass 2016).
  • Tanzanian: 81% report that NGOs have “benefited” their community (Jivani 2010).
  • Malawi: 60% agree that “Development NGOs provide services than cannot be provided by any other agency”; 68% consider NGOs to be effective (Jamali 2014).
  • Liberia: 23% of respondents trust government but 72% trust NGOs; 72% describe government as corrupt, but 19% describe NGOs as corrupt (Tsai, 2017).

NGOs & Politics

NGO service delivery may weaken the ‘Fiscal Link’

  • Reduce reliance of government on taxation
  • Reduce reliance on citizens on PSD
  • Weaken the link between government performance and citizen welfare

NGO service delivery may undermine accountability

  • Politicians get credit for NGO PSD
  • NGOs make people more apolitical about government PSD

NGOs & Politics

NGOs as complements to the state (J. Brass 2014)

  • Joint implementation / co-production
    • Learning
    • Resource sharing
  • Participation in government decision making
    • Lobbying for policy-changes
    • Transmitting information on citizen preferences
  • Integration of NGOs into government plans

The Limitations of NGOs

Sector Govt NGO Count
Health 13% 87% 479
Education 42% 58% 242
Agriculture/Extension 32% 68% 182
Social Infrastructure 32% 68% 291
Transportation 100% 0% 96
Energy 100% 0% 49
Water and Sanitation 70% 30% 259
Business/Trade Development 87% 13% 15
Total 45% 55% 1900

Bold et al. (2018)

Scaling Up Education Reforms

Hiring contract teachers to improve text scores

  1. Smaller class sizes
  2. Higher motivation

Scaling up

  • RCT pilot simultaneous with government scale-up

Context

Contract teachers

  • Lower cost
  • Similar qualifications
  • Different profile
    • Selection (firing)
    • Incentives (pay and retention)

Research Design

Scaling Up Education Reforms

Random assignment of:

  • Government vs NGO implementation
  • Structure of contract
    • Local vs central control of hiring/firing
    • Role of school management committees
    • Salary

Research Design

Research Design


Research Design

  • Attrition
  • Compliance
    • NGO implementation (+)
    • Local hiring (+)
    • Higher salaries (+)
    • Small class size reduction

Findings

Findings

Findings

  • NGO implementation increased test scores
  • Government implementation had no effect
    • Teacher effort: No
    • Government monitoring: No
    • Bureaucratic delays in payment: Yes (⅓ of effect)
    • Political economy factors: Yes (union identification)

What does this tell us about the limitations of NGOs?

Review of Data Assignment 1

Additive Scale

What is an additive scale?

  • Simple sum across columns (index = column_1 + column_2)

Takeaways

  • When variables are measured on a common scale
  • When components contribute equally
  • When you are interested in a cumulative amount of something
  • Not good for likert scales
  • How to deal with NAs

References

Bates, Robert H. 1981. Markets and States in Tropical Africa: The Political Basis of Agricultural Policies. Univ of California Press.
Brass, Jennifer. 2014. “Blurring the Boundaries: NGOs, the State, and Service Provision in Kenya.” The Politics of Non-State Welfare.
———. 2016. Allies or Adversaries: NGOs and the State in Africa. Cambridge University Press. https://doi.org/https://doi.org/10.1017/CBO9781316678527.
Brass, Jennifer N. 2012. “Why Do NGOs Go Where They Go? Evidence from Kenya.” World Development 40 (2): 387–401.
Chirwa, Danwood M. 2016. “Access to Medicines and Health Care in Sub-Saharan Africa: A Historical Perspective.” Md. J. Int’l L. 31: 21.
Fafchamps, Marcel, and Trudy Owens. 2009. “The Determinants of Funding to Ugandan Nongovernmental Organizations.” The World Bank Economic Review.
Green, A, J Shaw, F Dimmock, and Cath Conn. 2002. “A Shared Mission? Changing Relationships Between Government and Church Health Services in Africa.” The International Journal of Health Planning and Management 17 (4): 333–53.
Herbst, Jeffrey. 2000. States and Power in Africa: Comparative Lessons in Authority and Control. Princeton University Press.
Hoffman, Barak D, and Clark C Gibson. 2005. “Fiscal Governance and Public Services: Evidence from Tanzania and Zambia.” San Diego: Department of Political Science, University of California, San Diego.
Jamali, Tiyesere Mercy. 2014. “Are Malawian Adults Turning Pink? Exploring Public Opinion on Women’s Political Leadership.” Afrobarometer Briefing Paper 126.
Jennings, Michael. 2014. “Bridging the Local and the Global: Faith-Based Organisations and the Emergence of the Non-State Provider Sector in Tanzania.” The Politics of Non-State Welfare.
Jivani, Razeen. 2010. “What are the Impacts of Non-Governmental Organizations on the Lives of the Citizens of Tanzania?”
Kapur, Devesh, and Dennis Whittle. 2009. “Can the Privatization of Foreign Aid Enhance Accountability.” NYU Journal of International Law & Politics 42: 1143.
Munthali, AC, H Mannan, M MacLachlan, L Swartz, CM Makupe, and C Chilimampunga. 2015. “Non-use of Formal Health Services in Malawi: Perceptions from Non-users.” Malawi Medical Journal 26 (4): 126–32.
Reinikka, Ritva, and Jakob Svensson. 2010. “Working For God? Evidence From A Change In Financing Of Nonprofit Health Care Providers In Uganda.” Journal of the European Economic Association 8 (6): 1159–78.
Troesken, Werner. 2001. “Race, Disease, and the Provision of Water in American Cities, 1889–1921.” The Journal of Economic History 61 (3): 750–76.
Tumwesigye, Tonny. 2013. “Health Service Delivery by the PNFP Subsector in Uganda.” Uganda Protestant Medical Bureau.
Young, Crawford. 1988. The African Colonial State in Comparative Perspective. Yale University Press.