Does foreign aid buy votes for bad governments? This study from Uganda shows the opposite.

A whopping 40% of Uganda’s government budget comes from foreign aid. This is a regime that is getting more and more autocratic, going the way of an Ethiopia or (I fear) a Zimbabwe. So of all the angst about aid, and critiques of foreign assistance, it’s surprising that I don’t hear this one more often: is foreign aid propping up bad guys? It seems irresponsible not to know the answer.

I would have thought the answer was “of course we are propping up thugs”, but data from one program in Uganda points in the opposite direction: people who got a big government grant for their business worked to get the opposition election. I don’t know exactly why, but it looks to me like a little increase in wealth freed people from patronage machines.

A few years ago I evaluated a fairly successful government employment program in Uganda, where cash grants of about $400 helped young people increase their self-employment and earnings by about 40%. At the time we also collected data on how much people participated in the 2011 elections, what parties they liked and disliked, and other political behavior. But like a lot of academics I have more data than I can analyze. Plus once I found this result I never knew what to make of it. So it took years before I could write up a real paper with my two coauthors, Mathilde Emeriau and Nathan Fiala. It’s now up.

The cash grants went out in 2008. This was a pretty meritocratic program. It didn’t target political supporters, it had little pork, and the government couldn’t take it back. The Ugandan government was hoping that good development policy would build its political support in the north of the country.

But instead of rewarding the government in the 2011 elections, compared to the random control group, the people who actually got the grant increased their opposition party membership, campaigning, and voting. Opposition voting went from 12% to 16%, a one third increase.

We went through a bunch of possible explanations. As with most experiments, it’s hard to figure out why something happened, especially if the result was unexpected. (We’d geared our survey questions to understand the opposite result.) But we did notice one interesting pattern: higher incomes are associated with opposition support, and income changes seem to account for a god part of the treatment effect on voting.

This possibility has been dangled out before. Beatriz Magaloni has some work on Mexico arguing that financially independent voters are less dependent on favors from the ruling party. Nancy Hite has some unpublished work from the Philippines suggesting that microfinance untangles people from politicized loan networks.

I wonder if what we’re seeing in Uganda is a bigger phenomenon: that financial independence frees the poor to express their political preferences publicly, since they’re less reliant on patronage and other political transfers. If so it’s a micro-level version of an old fashioned story about how democratization follows from economic development.

Given how much money countries give away in aid, this seems like an important question to answer. One easy way to add to the evidence is the huge number of randomized trials of anti-poverty programs. Simply adding on post-election questions from the regional barometer studies (Afrobarometer, Latinobarometer, etc) would go a long ways to increasing the evidence.

Downstream studies are also a good idea, where you go back for another round of survey data after an election. That’s how Hite got her Philippines data. And we will go back to Uganda next year for the 9-year follow up, and will get information on the 2016 elections while there. This is low hanging fruit for grad students and junior faculty.

10 thoughts on “Does foreign aid buy votes for bad governments? This study from Uganda shows the opposite.

  1. A recent paper by Faisal Ahmed (Does Foreign Aid Harm Political Rights? Evidence from U.S. Aid.) is related to your question “is foreign aid propping up bad guys?” Abstract: “For a sample of 150 countries from 1972 to 2008, U.S. aid harms political rights, fosters other forms of state repression…”
    Best,
    Joan

  2. Would you consider a qualitative enquiry around this instead? Would be a cheaper, quicker way to understand unintended consequences or causal claims.

  3. The lead in seems a little misleading. I think the sense in which most people suspect foreign aid props of bad guys is by paying the bad guys directly. People are probably unsure about whether aid that does not go to governments props them up (by pacifying the population) or not (by making people more able to resist).

  4. Since the aid in particular was meritocratic, and there was less ambiguity on whom the aid should go to, my impression is that the Ugandan government had less leeway to use the funding for political gain. The cash transfers that have been emphasized by your (Dr. Blattman) work tend to not go through government agencies, thus too can not be used for patronage.
    I’m curious about your thoughts on the caveats to your studies. Are my impressions wrong? Should analysis of US Aid be more precise?

  5. In initial fieldwork in Pakistan, where I interviewed recipients of a national income support program, I get the opposite sense. For as little as $10-$20 per month paid out to eligible household’s (determined on the basis of a poverty score) female members, local politicians tend to demand participation in rallies as well as votes. In a survey I will roll out in February, I want to ask whether they voted for the same party that was in power when they became beneficiaries. It is also interesting because the program was rolled out at the federal level but many people give its credit to their local politician. I think the amount of the grant and its merit component may be pivotal to the results of your study.

  6. So there’s a big difference between aid-funded cash hand outs that are perceived as coming from the incumbent and could be withdrawn at their discretion, and cash handouts the government can’t take back?

  7. Very interesting. Though I’m not sure about the premise that when people vote for a repressive government that gives them aid, they are “rewarding” the regime or acting out of gratitude, necessarily.
    I’ve been in and out of Gulu for a decade now and at election times, one of the main reasons my friends give for voting NRM is that they feel “Mzee will win no matter what” and they worry that if the district were to go FDC, or DP, or what have you, M7 would punish it after the elections by withholding funds and aid. — The logic here being not so much one of rewarding the government for existing assistance, but rather of deferring to the ruling party out of fear of future retaliation.
    Against such a backdrop, it makes sense that empowering people financially would free them to vote for opposition candidates. But the economic empowerment would have to be pretty widespread (and stable) to have a significant impact, don’t you think?

  8. So aid that helps people improve their individual income or education probably has a good result by creating citizens that will support alternatives to repressive parties. But aid that gives basic services like hospitals, food, and infrastructure actual keeps the regime in power. If Ugandans had no roads, power, hospitals, or food they would be more inclined to stand up against the regime.

  9. The correlation between financial independence and freedom of decision making is obvious. From the household level to public space, income is a major factor in freedom of conscience. It is not surprising that the study confirms that those with better incomes are more likely to go with the opposition especially in a context of constricted space like Uganda.

  10. I would have thought the answer was “of course we are propping up thugs”, but data from one program in Uganda points in the opposite direction: people who got a big government grant for their business worked to get the opposition election.
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