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Foreign aid and power play: Political cycles in world bank’s procurement allocation

Author

Listed:
  • Antoine Boucher

    (Aix-Marseille School of Economics, Georg-August-University of Goettingen = Georg-August-Universität Göttingen, Université Paris Dauphine-PSL - PSL - Université Paris Sciences et Lettres)

  • Lisa Chauvet

    (CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique, UP1 - Université Paris 1 Panthéon-Sorbonne)

  • Marin Ferry

    (ERUDITE - Equipe de Recherche sur l’Utilisation des Données Individuelles en lien avec la Théorie Economique - UPEM - Université Paris-Est Marne-la-Vallée - UPEC UP12 - Université Paris-Est Créteil Val-de-Marne - Paris 12, LEDA-DIAL - Développement, Institutions et Mondialisation - LEDa - Laboratoire d'Economie de Dauphine - IRD - Institut de Recherche pour le Développement - Université Paris Dauphine-PSL - PSL - Université Paris Sciences et Lettres - CNRS - Centre National de la Recherche Scientifique)

Abstract

This paper examines the existence of political cycles in the awarding of World Bank procurement contracts around elections. We analyze elections in the home country of firms winning these contracts, distinguishing between firms based in the aid recipient country (i.e., domestic firms) and those from other supplier countries (i.e., foreign firms). Our findings indicate that domestic firms are more likely to secure larger contracts around elections in their home country, especially when corporate donations to candidates are allowed. Additionally, our results reveal an increase in contract sizes awarded to foreign firms before elections in their home country. This cross-border political cycle appears to be driven by strong aid partnerships and historical colonial ties between the supplier and recipient countries. These findings reveal a political dimension in procurement dynamics with potential implications for development resource allocation. Understanding these patterns can help enhance the transparency and effectiveness of aid-funded contracting.

Suggested Citation

  • Antoine Boucher & Lisa Chauvet & Marin Ferry, 2027. "Foreign aid and power play: Political cycles in world bank’s procurement allocation," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) hal-05850221, HAL.
    • Handle: RePEc:hal:cesptp:hal-05850221
    DOI: 10.1016/j.worlddev.2026.107582
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