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The political economy of aid allocation: Aid and incumbency at the local level in Sub Saharan Africa

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  • Knutsen, Tora
  • Kotsadam, Andreas

Abstract

Aid allocation within countries is often thought of as a strategic action by the incumbent leaders to further their own goals. Theoretically, however, the effects of aid may be either positive or negative and the empirical evidence is limited. By matching geo-coded data on aid projects to 101 792 respondents in five waves of the Afrobarometer, we investigate the effects of aid on incumbency support using project fixed effects. We estimate the effects for World Bank aid and Chinese aid separately and find positive effects for the former and no robust effect for the latter. For neither project donor do we find effects on turnout and that aid is not targeting areas with previously higher incumbency support. We find little support for the notion that economic voting is driving the result as individuals self-perceived economic conditions are not affected. The positive effects for the World Bank aid projects seem to be mediated by trust in the politicians, whereas we find no effects of Chinese aid on trust.

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  • Knutsen, Tora & Kotsadam, Andreas, 2020. "The political economy of aid allocation: Aid and incumbency at the local level in Sub Saharan Africa," World Development, Elsevier, vol. 127(C).
    • Handle: RePEc:eee:wdevel:v:127:y:2020:i:c:s0305750x1930378x
    DOI: 10.1016/j.worlddev.2019.104729
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    5. Ann-Sofie Isaksson & Andreas Kotsadam, 2020. "Chinese Aid to Africa: Distinguishing Features and Local Effects," CESifo Forum, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 21(02), pages 27-31, July.
    6. McCauley, John F. & Pearson, Margaret M. & Wang, Xiaonan, 2022. "Does Chinese FDI in Africa inspire support for a china model of development?," World Development, Elsevier, vol. 150(C).
    7. Samuel Brazys & Minhaj Mahmud, 2022. "Poisoning the Well? The "Last Mile" Politics of Donor Control and Elite Capture in Bangladesh's Arsenic Mitigation," Working Papers 202207, Geary Institute, University College Dublin.
    8. Philip Akrofi Atitianti, 2023. "The impact of Chinese aid on political trust," Journal of International Development, John Wiley & Sons, Ltd., vol. 35(2), pages 233-259, March.
    9. Dreher, Axel & Fuchs, Andreas & Hodler, Roland & Parks, Bradley C. & Raschky, Paul A. & Tierney, Michael J., 2021. "Is Favoritism a Threat to Chinese Aid Effectiveness? A Subnational Analysis of Chinese Development Projects," World Development, Elsevier, vol. 139(C).
    10. Jung, Woojin, 2023. "Mapping community development aid: Spatial analysis in Myanmar," World Development, Elsevier, vol. 164(C).
    11. Isaksson, Ann-Sofie, 2020. "Chinese Aid and Local Ethnic Identification," International Organization, Cambridge University Press, vol. 74(4), pages 833-852, October.
    12. Gehring, Kai & Kaplan, Lennart C. & Wong, Melvin H.L., 2022. "China and the World Bank—How contrasting development approaches affect the stability of African states," Journal of Development Economics, Elsevier, vol. 158(C).
    13. Ahlerup, Pelle & Sundström, Aksel & Jagers, Sverker C & Sjöstedt, Martin, 2023. "Drought and Political Trust," Working Papers in Economics 832, University of Gothenburg, Department of Economics.
    14. Lisa Chauvet & Marin Ferry, 2023. "L’efficacité de l’aide : quelles évolutions de la littérature depuis deux décennies ? WP329," Working Papers hal-04141543, HAL.
    15. BenYishay, Ariel & DiLorenzo, Matthew & Dolan, Carrie, 2022. "The economic efficiency of aid targeting," World Development, Elsevier, vol. 160(C).
    16. Dreher, Axel & Lang, Valentin & Reinsberg, Bernhard, 2024. "Aid effectiveness and donor motives," World Development, Elsevier, vol. 176(C).
    17. Djemaï, Elodie & Kevane, Michael, 2023. "Effects of education on political engagement in rural Burkina Faso," World Development, Elsevier, vol. 165(C).
    18. Adam, Antonis & Tsarsitalidou, Sofia, 2022. "The effect of international development association's (IDA) aid on conflict. A fuzzy regression discontinuity approach," European Journal of Political Economy, Elsevier, vol. 74(C).
    19. Sargis Karavardanyan, 2022. "Short-Term Harm, Long-Term Prosperity? Democracy, Corruption and Foreign Direct Investments in Sino-African Economic Relations," Comparative Economic Studies, Palgrave Macmillan;Association for Comparative Economic Studies, vol. 64(3), pages 417-486, September.
    20. Dyzenhaus, Alex, 2021. "Patronage or policy? The politics of property rights formalization in Kenya," World Development, Elsevier, vol. 146(C).

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