Poisoning the Well? The "Last Mile" Politics of Donor Control and Elite Capture in Bangladesh's Arsenic Mitigation

Negative externalities stemming from export-oriented activity in the developing world spark concerns of a "race to the bottom" wherein countries sacrifice human or environmental health in the pursuit of growth. Efforts to mitigate these effects are often inherently political, and it is difficult to discern if those efforts reach all intended beneficiaries or are instead captured by socio-economic elites. We advance an argument that as spatial precision increases it is likely that donors lose control and recipients can capture foreign aid. Using a combination of observational and causal inference techniques, with a wide range of existing and novel geo-spatial data, we find evidence in Bangladesh that proximity to exporting firms is associated with higher levels of groundwater arsenic, but that mitigation measures only appear to have a causal effect in reducing arsenic when they are located near an exporting firm. We argue that this supports a political economy rationale wherein donors may achieve their aims at a mezzo level, while powerful socio-economic interests are able to capture and direct resources at a micro level, potentially exacerbating intra-country inequality.