research frontiers in foreign aid
The work I presented is a very rough first draft, co-authored with Eric Kramon and Tyson Roberts. We look at how foreign aid is allocated in Malawi, and the subsequent impact that aid has on development outcomes. We use data from the Malawi Geocoding Project and focus on aid by sector, i.e., is education aid more likely to be allocated to politically important areas or based on need? And does more health aid have an impact on health outcomes? Our results are preliminary, and there’s still quite a bit of work to be done, but in our initial analysis, we see aggregate aid does not seem to target the neediest areas, but instead there appears to be targeting of areas in which the dominant ethnic group is the same ethnic group of the president. Co-ethnic targeting does not result in our analysis of sector-specific aid (we have looked only at health and education thus far). There is some evidence, however, that both education and health aid are driven by needs in education and health, respectively. Because folks have asked, I’ve posted the slides from the presentation.
I found the other papers presented at the conference really interesting. I’ll share just a couple:
Niklas Potrafke presented a paper co-authored with Heinrich Ursprung that looked at why we give foreign aid. Though the scholarship identifies reasons of self-interest (geo-strategic or commercial) and humanitarianism, Potrafke and Ursprung consider an alternative explanation where aid is viewed as an expressive act that affirms the donor’s identity of being a caring person. They use survey data of German university students from 25 universities over 30 years, with more than 900 variables.
Jacob Shapiro presented a paper coauthored with Eli Berman, Joseph Felter, and Erin Troland on development spending in conflict situations. It’s particularly important research given how much aid goes to conflict countries (20-40% of aid from 1976-2010), especially since conflict incidence has declined over time. Using geocoded data from Iraq, Shapiro and colleagues found small aid projects and professional development expertise to reduce the incidence of violence.
All of the papers are posted online.