How Political Insiders Lose Out When International Aid Underperforms: Evidence from a Participatory Development Experiment in Ghana

Kate Baldwin, Dean Karlan, Christopher Udry and Ernest Appiah

No 26930, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Participatory development is designed to mitigate problems of political bias in pre-existing local government but also interacts with it in complex ways. Using a five-year randomized controlled study in 97 clusters of villages (194 villages) in Ghana, we analyze the effects of a major participatory development program on participation in, leadership of and investment by preexisting political institutions, and on households’ overall socioeconomic well-being. Applying theoretical insights on political participation and redistributive politics, we consider the possibility of both cross-institutional mobilization and displacement, and heterogeneous effects by partisanship. We find the government and its political supporters acted with high expectations for the participatory approach: treatment led to increased participation in local governance and reallocation of resources. But the results did not meet expectations, resulting in a worsening of socioeconomic wellbeing in treatment versus control villages for government supporters. This demonstrates international aid’s complex distributional consequences.

JEL-codes: H4 H7 O12 O17 O19 (search for similar items in EconPapers)
Date: 2020-04
New Economics Papers: this item is included in nep-exp and nep-pol
Note: DEV POL
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Citations: View citations in EconPapers (3)

Published as Kate Baldwin & Dean Karlan & Christopher Udry & Ernest Appiah, 2023. "How political insiders lose out when international aid underperforms: Evidence from a participatory development experiment in Ghana," World Development, vol 169.

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