International Politics and Internal Aid Allocation

• In Event: Poster Session: International Collaboration

Abstract

Scholars have long studied the ways in which strategic relationships between donors and recipients influence patterns of cross-country aid allocation. With the increasing availability of precise geocoded project-level development finance data, the aid allocation literature has largely shifted its focus toward the task of explaining patterns of aid allocation within countries. Recent work emphasizes how local political incentives, measures of need, and the identity of donors influence patterns of subnational aid allocation. This paper bridges these research agendas by asking whether international factors affect geographic patterns of aid allocation within countries. The logic motivating my approach in this paper is simple: if recipient strategic importance increases the willingness of the donors to provide development projects, leaders in strategically-important recipient countries may also gain greater discretion over the distribution of aid projects within their countries. I use a variety indicators of strategic importance -- temporary membership on the United Nations Security Council, voting affinity with the United States in the United Nations, and alliance status with the United States -- to investigate this question. I examine two outcome indicators of subnational aid allocation using data on geo-referenced aid projects in all countries that received World Bank projects throughout the period of 1995 to 2014. First, I look at variation in the average precision ratings of aid projects within countries. All else equal, projects with less precise geographic information may be subject to greater leader discretion. Here I find some evidence that international factors are associated with greater discretion in subnational aid allocation. Second, I look at patterns of aid allocation toward the region in which a current leader was born, since others have argued that, given the opportunity, leaders will tend to direct aid projects to their home regions. Using this outcome measure, I find no evidence that international strategic factors that are important for aid allocation at the cross-national level matter for the allocation of aid projects to a leader's birth region. Thus, while the results provide some indication that international factors are associated with patterns of aid allocation at the subnational level, they provide less support for the view that leaders systematically favor their home regions when given the opportunity to do so.

Author

• Matthew DiLorenzo, Old Dominion University