Research / BFI Working PaperJun 18, 2021

Aid Fragmentation and Corruption

Travers B. Child, Austin Wright, Yun Xiao

Effectiveness of development aid is widely perceived to suffer in the presence of multiple donors with overlapping responsibilities. We test existing theory on aid fragmentation by studying aid provision under numerous donors throughout Afghanistan from 2006-2009. Our study leverages granular military data on aid and conflict, and household survey data on corruption and public opinion. We conduct the first micro-level analysis of aid fragmentation. When delivered by a single donor, aid appears to curtail corruption, boost public opinion, and reduce conflict. But under donor fragmentation, the benefits of aid are significantly reduced. Our results suggest under high volumes of aid provision, fragmentation facilitates corruption and thereby erodes aid’s ability to win hearts and minds in the fight against insurgents. At moderate levels of aid, however, fragmentation may actually benefit the quality of institutions. Our findings remain stable when accounting for a rich set of observable confounds. Moreover, we obtain robust estimates when correcting for bias likely arising from the omission of unobservable factors.

More Research From These Scholars

BFI Working Paper Oct 31, 2022

Civil Response to Government Alerts Declines During Russian Invasion of Ukraine

David Van Dijcke, Mark Polyak, Austin Wright
Topics:  Uncategorized
BFI Working Paper Nov 30, 2020

Political Economy of Crisis Response

Arda Gitmez, Konstantin Sonin, Austin Wright
Topics:  COVID-19
BFI Working Paper Nov 9, 2020

Unmasking Partisanship: Polarization Undermines Public Response to Collective Risk

Maria Milosh, Marcus Painter, Konstantin Sonin, David Van Dijcke, Austin Wright
Topics:  COVID-19