Does Aid Target Votes? How Electoral Strategies Shape the Distribution of Aid1

While the link between domestic political institutions and aid effectiveness is well established, we know little about how the political incentives of incumbents actually shape the distribution of aid. In this paper, I argue that incumbents care about the distribution of aid because aid can influence votes. Using new data on the geographic distribution of World Bank and African Development Bank projects in Kenya, I establish that there is a consistent bias in the distribution of aid towards electorally strategic constituencies, and away from constituencies with a high number of votes for opposition parties. In order to identify this effect, I take advantage of the fact that Kenya had significant regime changes in 2002 and 2007 which altered the geographic distribution of support for the incumbent regime. These results suggest that the distributional implications of aid play a crucial role in how aid gets distributed and provide some original insights into why there is often disconnect between the intentions of donors and the outcomes of aid. 1 A number of people have provided considerable assistance in the process of this research, including Lawrence Broz, Stephan Haggard, Megumi Naoi, Craig McIntosh, Clark Gibson, James Long, Jeremy Horowitz, Desha Girod, Josh Powell, Mike Findley, Sarah Knoesen, Megan Becker, and participants at the UCSD International Relations and Comparative Politics Workshops. I am also indebted to Nolan Weber for data collection assistance, and to Josh Powell, Michael Findley, Daniel Nielson and participants in the AidData project for being open with their advice and data. A previous version of this paper was presented at the 2011 American Political Science Conference and the 2011 UCSD International Relations Retreat. All remaining errors should be blamed on the author. 2 “People are told if they don’t vote EPRDF, then no fertilizers, [and] clinics. If you get sick, they don’t get a referral note from the kebele official for hospital in Addis Ababa. ” Ethiopian OFDM candidate Bulcha Demeske (Human Rights Watch 2009) The practice of allocating foreign aid for political purposes has a long and sometimes less than savory history. As the above quote illustrates, the Zenawi government in Ethiopia consistently withheld the distribution of foreign aid from families that failed to vote for the EPRDF. A Human Rights Watch report documents systematic bias in the distribution of basic agricultural inputs, such as seed and fertilizer, as well as food aid to opposition supporters (Human Rights Watch 2009). Despite this abuse, the Zenawi government continued to receive over $3 billion in aid distribution each year (OECD 2011). In this paper I seek to understand how electoral strategies shape the distribution of foreign aid. While there is a growing recognition that corruption and elite capture plays a role in the distribution of foreign aid, most of these studies have been surprising apolitical, and we know very little as a discipline about how political strategies actually shape how and where foreign aid gets distributed. This is a vital oversight. In particular, we know from a growing body of research on developing democracies that electoral strategies play a strong role in everything from taxation, to health and infrastructure investment. To the extent that incumbents have the ability to influence the distribution of aid, electoral incentives should shape the direction of this influence. In order to address the role of politics on aid distribution, I take advantage of new data, as well as collect and code additional data, on the subnational distribution of World Bank and African Development Bank projects in Kenya over the last decade. I argue that the