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Wedded to Prosperity? Spousal Favoritism in Foreign Aid and Regional Development

Author

Listed:
  • Bomprezzi, Pietro
  • Dreher, Axel
  • Fuchs, Andreas
  • Hailer, Teresa
  • Kammerlander, Andreas
  • Kaplan, Lennart
  • Marchesi, Silvia
  • Masi, Tania
  • Perlik, Kerstin
  • Robert, Charlotte

Abstract

This paper examines the influence of political leaders' spouses on resource allocation and regional development. We construct two new global datasets: one tracking leaders' and spouses' characteristics and one that geocodes aid projects, including new data from the United States and 18 European donors. For 1990-2020, we find that Western bilateral donors direct significantly more aid to spouses’ birth regions during their partners' tenure, while leader birth regions do not experience comparable favoritism, consistent with donors' efforts to avoid the appearance of political bias. Spousal favoritism is best explained by recipient-driven informal influence, particularly around elections, rather than systematic spouse selection, career preparation, settlement motives, or strategic donor behavior. Aid inflows to spouses' birth regions are less effective, turning favoritism into a liability for local development. Our findings suggest that even in closely monitored areas, such as foreign aid, political favoritism takes less visible channels, raising questions about accountability and effectiveness.

Suggested Citation

  • Bomprezzi, Pietro & Dreher, Axel & Fuchs, Andreas & Hailer, Teresa & Kammerlander, Andreas & Kaplan, Lennart & Marchesi, Silvia & Masi, Tania & Perlik, Kerstin & Robert, Charlotte, 2024. "Wedded to Prosperity? Spousal Favoritism in Foreign Aid and Regional Development," CEPR Discussion Papers 18878, Centre for Economic Policy Research.
    • Handle: RePEc:cpr:ceprdp:18878
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    Keywords

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    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • F35 - International Economics - - International Finance - - - Foreign Aid
    • O19 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - International Linkages to Development; Role of International Organizations
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • P33 - Political Economy and Comparative Economic Systems - - Socialist Institutions and Their Transitions - - - International Trade, Finance, Investment, Relations, and Aid
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes

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