International Politics and the Subnational Allocation of World Bank Development Projects

Abstract

Temporary United Nations Security Council (UNSC) members receive more World Bank projects. I consider the potential for UNSC status to influence aid allocation within recipient countries. While strategically important recipients might gain greater discretion over the internal distribution of aid, no clear evidence establishes whether World Bank aid tends to succumb to political pressures within countries. I examine whether political favoritism within countries varies with UNSC status and find little evidence for a connection. While cross-national lending may follow politics, subnational allocation seems to be unrelated to international politics, which has important implications for the efficacy of Bank assistance.