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How Political Insiders Lose Out When International Aid Underperforms: Evidence from a Participatory Development Experiment in Ghana

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  • Kate Baldwin
  • Dean Karlan
  • Christopher R. Udry
  • Ernest Appiah

Abstract

Participatory development is designed to mitigate problems of political bias in pre-existing local government but also interacts with it in complex ways. Using a five-year randomized controlled study in 97 clusters of villages (194 villages) in Ghana, we analyze the effects of a major participatory development program on participation in, leadership of and investment by preexisting political institutions, and on households’ overall socioeconomic well-being. Applying theoretical insights on political participation and redistributive politics, we consider the possibility of both cross-institutional mobilization and displacement, and heterogeneous effects by partisanship. We find the government and its political supporters acted with high expectations for the participatory approach: treatment led to increased participation in local governance and reallocation of resources. But the results did not meet expectations, resulting in a worsening of socioeconomic wellbeing in treatment versus control villages for government supporters. This demonstrates international aid’s complex distributional consequences.

Suggested Citation

  • Kate Baldwin & Dean Karlan & Christopher R. Udry & Ernest Appiah, 2020. "How Political Insiders Lose Out When International Aid Underperforms: Evidence from a Participatory Development Experiment in Ghana," NBER Working Papers 26930, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:26930
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    3. Richard Akresh & Daniel Halim & Marieke Kleemans, 2023. "Long-Term and Intergenerational Effects of Education: Evidence from School Construction in Indonesia," The Economic Journal, Royal Economic Society, vol. 133(650), pages 582-612.

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    More about this item

    JEL classification:

    • H4 - Public Economics - - Publicly Provided Goods
    • H7 - Public Economics - - State and Local Government; Intergovernmental Relations
    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
    • O17 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements
    • O19 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - International Linkages to Development; Role of International Organizations

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