Wedded to Prosperity? Spousal Favoritism in Foreign Aid and Regional Development

Pietro Bomprezzi, Axel Dreher, Andreas Fuchs, Teresa Hailer, Andreas Kammerlander, Lennart Kaplan, Silvia Marchesi, Tania Masi, Kerstin Perlik and Charlotte Robert

No 18878, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: This paper examines the influence of political leaders' spouses on resource allocation and regional development. We construct two new global datasets: one tracking leaders' and spouses' characteristics and one that geocodes aid projects, including new data from the United States and 18 European donors. For 1990-2020, we find that Western bilateral donors direct significantly more aid to spouses’ birth regions during their partners' tenure, while leader birth regions do not experience comparable favoritism, consistent with donors' efforts to avoid the appearance of political bias. Spousal favoritism is best explained by recipient-driven informal influence, particularly around elections, rather than systematic spouse selection, career preparation, settlement motives, or strategic donor behavior. Aid inflows to spouses' birth regions are less effective, turning favoritism into a liability for local development. Our findings suggest that even in closely monitored areas, such as foreign aid, political favoritism takes less visible channels, raising questions about accountability and effectiveness.

Keywords: ODA; Favoritism; Birth regions; Political economy of development; Geoeconomics (search for similar items in EconPapers)
JEL-codes: D72 F35 O19 O47 P33 R11 (search for similar items in EconPapers)
Date: 2024-03
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