The Costs of Favoritism: Is Politically Driven Aid Less Effective?
By Axel Dreher, Stephan Klasen, J. Vreeland, E. Werker. Economic development and cultural change, 2013
165 citations recorded by the source corpus.
Governments provide foreign aid for both political and economic reasons, as is now well documented. Conventional wisdom holds that political motivations lower the effectiveness of aid in promoting developmental objectives. We test this claim by focusing on a setting in which we observe “effectiveness” with some precision, using the ex post performance ratings of World Bank projects. Our measures of “political importance” are plausibly exogenous: temporary membership on the UN Security Council or the World Bank Executive Board. We find that political motivations have a detrimental effect for Security Council members only when the country already faces excessive short-term debt or debt service. This finding suggests that political influence in aid allocation may impair aid’s effectiveness only when the recipient country faces a weak macroeconomic position.
Subfields: Development, Information Systems, Safety Research
View Paper: https://www.semanticscholar.org/paper/099f8bdbdd1f6352cbbd48eb17783d75b4f71e7b
How researchers see this paper
The researchers whose trusted networks rank it highest, strongest advocate first. Every researcher gets a different order.
In Development
- Lindsay R. Dolan
- Richard Clark
- Peter Nunnenkamp
- Axel Dreher
- Hannes Öhler
- J. Vreeland
- R. Stone
- Diego F. Hernández
In Information Systems
In Safety Research
- Axel Dreher
- Lindsay R. Dolan
- Richard Clark
- Peter Nunnenkamp
- Hannes Öhler
- J. Vreeland
- A. Riddell
- Jakob de Haan
Citations in the corpus
- Aid and Growth at the Regional Level (2015, unknown): “2See Dreher et al. (2013).”
- Does Conditionality Work? A Test for an Innovative US Aid Scheme (2011, background): “Furthermore, Dreher et al. (2010) find that other donors followed the MCC by granting more aid to countries with compacts, pointing to additional indirect MCC effects.”
- Pleasing the Principal: U.S. Influence in World Bank Policymaking (2020, background): “There are, of course, many reasons why behaviors in countries actively borrowing from the IMF may differ from those not actively borrowing, or why countries in crisis might be more likely to both borrow from the IMF and apply bargaining leverage (Dreher et al. 2013; Vreeland and Dreher 2014).”