Claiming credit for foreign aid helps politicians hold power

 
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Politicians in developing democracies appear more likely to win reelection if they claim to have secured foreign aid, even if they had nothing to do with it.

The issue: Governments give other countries assistance for a number of reasons: concerns about stability or humanitarian emergencies, or to procure particular political outcomes. Scholars have uncovered reasons to be cynical about aid effectiveness: For example, sometimes politicians in aid-receiving countries divert aid to help themselves maintain power, sometimes by distributing funds as patronage or by ensuring aid projects are allocated to electoral supporters. Moreover, donor governments tend to give more money to their friends during election years. But until now little has been written about the impact of aid on local elections in developing democracies.

An academic study worth reading: “Foreign Aid and Undeserved Credit Claiming,” in American Journal of Political Science, 2016.

Study summary: Political scientists Cesi Cruz and Christina J. Schneider argue that politicians in developing democracies may not have control over how foreign aid is disbursed, but still take credit for development projects. They may pay regular visits to a project site during construction, cut a ribbon at an opening ceremony and then place a billboard featuring their image at the site after completion.

Such credit claiming “can therefore increase politicians’ chances of remaining in political power even though they had no role in securing the projects in the first place,” Cruz and Schneider argue.

This is a particular concern to donor governments in places where voters lack information about how aid decisions are made. But donors have little way to counter the information scarcity, especially when local politicians have an incentive to obfuscate.

Cruz and Schneider look specifically at a $182 million small-infrastructure development program in the Philippines funded by the World Bank. The project, known as KALAHI, targeted the poorest municipalities in the country. The World Bank, trying to prevent politicians from exploiting the aid, allocated funds directly to village accounts, rather than municipal mayors’ offices. Also, mayors had little influence over the selection and implementation of projects.

The authors selected this project to test their hypothesis “because it was expressly designed to prevent the political capture of funds.” And there is more accountability in the Philippines than in dictatorships like Equatorial Guinea or Uzbekistan, which hold tightly scripted elections.

In municipalities where KALAHI projects were conducted, the authors examine mayoral races and wins by incumbents (including family members, since incumbents, after they reach the three-term limit, often put forward a family member to continue a “dynasty”).

Findings:

  • Denying recipient governments control over aid does not stop them from “exploiting aid for political purposes.”
  • A KALAHI project in his or her district increases an incumbent’s chance of reelection by 12 percentage points, from 59 percent to 71 percent.
  • Nationwide, an earlier household survey found, residents gave mayors credit for initiating 39 percent of KALAHI projects. The mayors were responsible for none of the projects.
  • “Mayors whose municipalities were included in KALAHI were significantly more likely to be reelected even if the municipalities had not received the funding yet.”
  • The authors found substantial qualitative “evidence of credit-claiming tactics by mayors.” This often took the form of “huge billboards that announced the receipt of a KALAHI project, accompanied by a prominently placed picture of the mayor.” Voters then likely mistakenly “attributed the expected increase in welfare” to the incumbents and became more likely to support them at the polls.
  • Mayors visited KALAHI project villages 55 percent more than they visited villages in their districts that lacked a KALAHI project, indicating, the authors argue, a credit-claiming strategy.
  • By not counting villages that received some form of municipal funding, the authors found that KALAHI villages received 80 percent more visits from mayors. In other words, by “removing the instances of deserved credit claiming,” the authors found mayors paid 80 percent more visits to villages they do not help financially at all. That, the authors argue, is another sign of a credit-claiming strategy.
  • This “election effect” benefiting incumbent mayors lasts up to three years after the KALAHI project was announced in a village.

Helpful resources:

Many developed countries have international aid agencies. The United States doles out much of its development funds through the U.S. Agency for International Development (USAID). Researchers can track funds from this and other American departments through foreignassistance.gov – though the site appears to have a number of bugs.

Other research:

  • This 2014 paper in World Politics examines how successive governments in Kenya have used foreign aid as patronage to please their electoral supporters, translating aid into votes.
  • Looking at 97 countries between 1975 and 2004, this 2010 paper in American Political Science Review analyzes how autocracies channel foreign aid funds to help regime survival.
  • Donors tend to give more money to their friends during election years, finds this 2012 paper in American Economic Review.
  • Two papers – from 2009 and 2010 – argue that foreign aid’s effect on a government largely depends on the type of political system. 

 

Keywords: Foreign assistance, development funds, sustainability, patronage, corruption, petty officials

    Writer: | Last updated: January 9, 2017

    Citation: Cruz, Cesi; Schneider, Christina J. “Foreign Aid and Undeserved Credit Claiming,” American Journal of Political Science, 2016. doi: 10.1111/ajps.12285.
     

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