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

48 Pages Posted: 6 Apr 2020 Last revised: 7 Apr 2020

See all articles by Kate Baldwin

Kate Baldwin

Yale University

Dean Karlan

Northwestern University

Christopher Udry

Northwestern University

Ernest Appiah

Pentecost University College, Accra

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Date Written: April 2020

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.

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Suggested Citation

Baldwin, Kate and Karlan, Dean and Udry, Christopher and Appiah, Ernest, How Political Insiders Lose Out When International Aid Underperforms: Evidence from a Participatory Development Experiment in Ghana (April 2020). NBER Working Paper No. w26930, Available at SSRN: https://ssrn.com/abstract=3569395

Kate Baldwin (Contact Author)

Yale University ( email )

Dean Karlan

Northwestern University ( email )

2001 Sheridan Road
Evanston, IL 60208
United States

Christopher Udry

Northwestern University ( email )

2001 Sheridan Road
Evanston, IL 60208
United States

Ernest Appiah

Pentecost University College, Accra ( email )

P. O. Box KN 1739
Accra
Ghana

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