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Who Controls Foreign Aid? Elite versus Public Perceptions of Donor Influence in Aid-Dependent Uganda

  • Michael G. Findley, Adam S. Harris, Helen V. Milner and Daniel L. Nielson
Abstract

Does foreign aid enable or constrain elite capture of public revenues? Reflecting on prominent debates in the foreign aid literature, we examine whether recipient preferences are consistent with a view that foreign donors wield substantial control over the flow of aid dollars, making elite capture more difficult and mass benefits more likely. We compare elite and mass support for foreign aid versus government spending on development projects through a survey experiment with behavioral outcomes. A key innovation is a parallel experiment on members of the Ugandan national parliament and a representative sample of Ugandan citizens. For two actual aid projects, we randomly assigned different funders to the projects. Significant treatment effects reveal that members of parliament support government programs over foreign aid, whereas citizens prefer aid over government. Donor control also implies that citizens should favor foreign aid more and elites less as their perceptions of government clientelism and corruption increase. We explore this and report on other alternative mechanisms. Effects for citizens and elites are most apparent for those perceiving significant government corruption, suggesting that both sets of subjects perceive significant donor control over aid.

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