Reshaping Institutions: Evidence on Aid Impacts Using a Pre-Analysis Plan
AbstractAlthough institutions are believed to be key determinants of economic performance, there is limited evidence on how they can be successfully reformed. Evaluating the effects of specific reforms is complicated by the lack of exogenous variation in the presence of institutions; the difficulty of empirically measuring institutional performance; and the temptation to “cherry pick” a few novel treatment effect estimates from amongst the large number of indicators required to capture the complex and multi-faceted subject. We evaluate one attempt to make local institutions more egalitarian by imposing minority participation requirements in Sierra Leone and test for longer term learning-by-doing effects. In so doing, we address these three pervasive challenges by: exploiting the random assignment of a participatory local governance intervention, developing innovative real-world outcomes measures, and using a pre-analysis plan to bind our hands against data mining. The specific program under study is a “community driven development” (CDD) project, which has become a popular strategy amongst donors to improve local institutions in developing countries. We find positive short-run effects on local public goods provision and economic outcomes, but no sustained impacts on collective action, decision-making processes, or the involvement of marginalized groups (like women) in local affairs, indicating that the intervention was ineffective at durably reshaping local institutions. We further show that in the absence of a pre-analysis plan, we could have instead generated two highly divergent, equally erroneous interpretations of the impacts—one positive, one negative—of external aid on institutions.
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Bibliographic InfoPaper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 17012.
Date of creation: May 2011
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Other versions of this item:
- Katherine Casey & Rachel Glennerster & Edward Miguel, 2012. "Reshaping Institutions: Evidence on Aid Impacts Using a Preanalysis Plan," The Quarterly Journal of Economics, Oxford University Press, vol. 127(4), pages 1755-1812.
- F35 - International Economics - - International Finance - - - Foreign Aid
- H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
- O4 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity
This paper has been announced in the following NEP Reports:
- NEP-ALL-2011-05-14 (All new papers)
- NEP-CWA-2011-05-14 (Central & Western Asia)
- NEP-SOC-2011-05-14 (Social Norms & Social Capital)
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