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

83 Pages Posted: 8 May 2020

See all articles by Ernest Appiah

Ernest Appiah

Pentecost University College, Accra

Kate Baldwin

Yale University

Dean S. Karlan

Northwestern University - Kellogg School of Management; Yale University; Innovations for Poverty Action; Massachusetts Institute of Technology (MIT) - Abdul Latif Jameel Poverty Action Lab (J-PAL); National Bureau of Economic Research (NBER); Centre for Economic Policy Research (CEPR)

Christopher Udry

Northwestern University

Multiple version iconThere are 3 versions of this paper

Date Written: March 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.

Keywords: distributive politics, international aid, participatory development, political economy

JEL Classification: H4, H7, O12, O17, O19

Suggested Citation

Appiah, Ernest and Baldwin, Kate and Karlan, Dean S. and Udry, Christopher, How Political Insiders Lose Out When International Aid Underperforms: Evidence from a Participatory Development Experiment in Ghana (March 2020). CEPR Discussion Paper No. DP14537, Available at SSRN: https://ssrn.com/abstract=3594158

Ernest Appiah (Contact Author)

Pentecost University College, Accra ( email )

P. O. Box KN 1739
Accra
Ghana

Kate Baldwin

Yale University ( email )

Dean S. Karlan

Northwestern University - Kellogg School of Management ( email )

2001 Sheridan Road
Evanston, IL 60208
United States

Yale University ( email )

Box 208269
New Haven, CT 06520-8269
United States

Innovations for Poverty Action ( email )

1731 Connecticut Ave, 4th floor
New Haven, CT 20009
United States

Massachusetts Institute of Technology (MIT) - Abdul Latif Jameel Poverty Action Lab (J-PAL) ( email )

E60-246
77 Massachusetts Avenue
Cambridge, MA 02139
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Centre for Economic Policy Research (CEPR) ( email )

London
United Kingdom

Christopher Udry

Northwestern University ( email )

2001 Sheridan Road
Evanston, IL 60208
United States

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