Which Wheel Gets the Grease? Constituent Agency and Sub-national World Bank Aid Allocation

Questions of aid allocation have long focused on discerning the motivation of development donors. Less attention has been paid to the interests and agency of recipient state governments and even less to the interests and agency of constituencies within those states. An implicit assumption is often that the ‘poor’ either passively receive the patronage of their benefactors or they don’t. In this paper, we instead suggest that depending on the motivation of a donor, their sensitivity to needy subnational constituencies in aid allocation also depends on the political empowerment of those groups. In particular, we take advantage of the unique socio-cultural structure in India to examine if the political agency of scheduled castes and tribes (SC/STs) can explain patterns of district-level allocation of World Bank education aid. Using district-level data on a multi-year World Bank education program, district-level proportions of SC/ST population and of members of parliament we identify poor, but empowered, constituencies. We find that SC/ST districts receive more aid, even when controlling for baseline poverty and educational performance, but that these results are strongest when these districts are politically empowered. Our findings suggest that while donors may indeed respond to recipient needs, those recipients who also speak loudly for themselves fare better, highlighting the importance of constituent agency.