Foreign Aid, Foreign Policy, and Domestic Government Legitimacy: Experimental Evidence from Bangladesh

Abstract

Foreign aid donors try to make themselves visible as the funders of development projects in order to improve citizen attitudes abroad. Do target populations receive these political communications in the intended fashion, and do they succeed in changing attitudes? Despite the widespread use of the practice, there exists little evidence about the effectiveness of this strategy. We embed an informational experiment about a U.S.-funded health project in a nationwide survey in Bangladesh. Although we find limited recognition of the USAID brand, explicit information about U.S. funding slightly improves general perceptions of the United States. It does not, however, change respondent's opinions on substantive foreign policy issues. We also find, contrary to existing arguments that foreign aid undermines domestic government legitimacy, that the information increases confidence in local authorities. These results strengthen our understanding of the efficacy of promoting donor visibility and shed light on an important debate in the area of governance that assesses the effect of external actors on government legitimacy.

Can Economic Assistance Shape Combatant Support in Wartime? Experimental Evidence from Afghanistan

“…As such, aid initiatives will typically be accompanied by extensive efforts by political leaders to claim credit for these programs (Cruz and Schneider 2017;Dietrich, Mahmud, and Winters 2018;Dietrich and Winters 2015;Evans, Holtemeyer, and Kosec 2018;Guiteras and Mobarak 2016;Winters, Dietrich, and Mahmud 2017). Politicians may visit field sites, deliver speeches, and otherwise "brand" these projects in an attempt to use them as evidence of their skill and ability to provide for their constituents.…”

“…First, they boost the perceived competence of politicians involved because they managed to "capture" funds from foreign donors. In Bangladesh, for example, beneficiaries reported increased confidence in their local government once a USAID-funded project was revealed as foreign in origin (Dietrich, Mahmud, and Winters 2018). Similarly, in northeastern Afghanistan, villages with higher levels of foreign-funded infrastructure projects were associated with greater support for the district and provincial government than government-funded projects (Zürcher 2010).…”

Foreign aid, oil revenues, and political accountability: Evidence from six experiments in Ghana and Uganda

“…Ugandans favored aid because they believed it was much more likely to benefit them. In Bangladesh, Dietrich et al (2018) found that random assignment of information that neighborhood health clinics were funded by USAID significantly increased Bangladeshi citizens' confidence in local government. And de la Cuesta et al (Forthcoming) reported that citizens feel strong ownership over aid and oil money and value how it is allocated.…”

Democracy and Aid Donorship

“…Extensive literature documents that donor governments can benefit from their aid deliveries to other countries. For example, aid can promote geostrategic interests (e.g., Bearce and Tirone 2010;Fleck and Kilby 2010), help buy political support in international organizations (e.g., Kuziemko and Werker 2006;Vreeland and Dreher 2014;Dippel 2015;Kersting and Kilby 2016), boost exports (e.g., Martínez-Zarzoso et al 2009Hühne et al 2014), improve the donor country's image (e.g., Dietrich et al 2018;Eichenauer et al 2018), and contribute to regime changes in recipient countries that could align with donor interests (e.g., Bermeo 2011; Kersting and Kilby 2014). However, governments of low-and middle-income countries face strong opportunity costs when spending resources on outgoing development aid rather than investing them in the development of their own countries.…”