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Electoral motives and the subnational allocation of foreign aid in sub-Saharan Africa

Christiana Anaxagorou, Georgios Efthyvoulou () and Vassilis Sarantides ()

European Economic Review, 2020, vol. 127, issue C

Abstract: This paper examines how electoral motives shape the subnational allocation of foreign aid commitments by employing a newly constructed geocoded dataset for 14 sub-Saharan African countries over the period 2000–2012. Our results provide strong evidence of a core voter strategy: African leaders diverting Chinese aid towards regions with a high concentration of political supporters. However, no evidence of such preferential treatment is found for World Bank aid, suggesting that aid from traditional donors is less vulnerable to political manipulation. Our results also reveal that checks and balances in recipient countries are an important mediating factor of aid misallocation: while copartisan regions receive larger amounts of Chinese aid in environments with weak checks and balances, these effects disappear when stronger checks and balances are in place. This paper also offers case study evidence from Ghana. Exploiting the 2009 regime change in Ghana and using a difference-in-differences framework, we provide further support of copartisan targeting and confirm that Chinese aid is more manipulable than World Bank aid in this respect.

Keywords: Foreign aid; Elections; Africa; World Bank; China; Ghana (search for similar items in EconPapers)
JEL-codes: D72 D73 O43 P33 (search for similar items in EconPapers)
Date: 2020
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DOI: 10.1016/j.euroecorev.2020.103430

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European Economic Review is currently edited by T.S. Eicher, A. Imrohoroglu, E. Leeper, J. Oechssler and M. Pesendorfer

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