Foreign aid projects and trust in political institutions

Abstract

Do foreign aid projects undermine citizens' trust in local and national political institutions? Drawing on institutional theories of political trust, I hypothesize that foreign aid projects reduce trust in political institutions by lowering citizens' perceptions of government performance and raising perceptions of corruption. To analyze the impact of aid projects on trust, this article utilizes geolocated survey data on citizens' trust in political institutions from Afrobarometer Rounds 2–5 (2003–2012) and data on the location of foreign aid projects from AidData's Aid Information Management Systems datasets for Nigeria, Senegal, and Uganda. Using a spatial difference‐in‐difference strategy, the empirical results find that active aid projects are on average associated with decreased trust in the president, parliament, and local government council. An exploratory sectoral analysis suggests that the negative average treatment effect is driven by projects in the transportation, agriculture, education, and civil society sectors.

The impact of Chinese aid on political trust

“…Evaluating the effect of Chinese aid on trust in SSA, this paper concludes that Chinese aid reduces trust in the government. This finding is resistant to a battery of robustness checks and corroborates Watkins (2021), who also concludes that aid reduces trust. Consequently, declining political trust appears to be one of the unintended adverse effects associated with aid.…”

“…Watkins (2021) finds that aid reduces trust in a sample of three countries (Nigeria, Senegal, and Uganda). This paper extends the analyses to focus on the impacts of Chinese aid, which possesses distinguishable features (Hoeffler & Sterck, 2022), in a sample of 31 SSA countries and compares the results to projects funded by the World Bank.…”

“…More importantly, this paper is the first to use geocoded data on Chinese development assistance to examine how exposure to Chinese aid influences citizenry political trust in SSA countries. Most closely related to this paper is Watkins (2021), who assesses the impact of aid on trust in political institutions in a sample of three countries (Nigeria, Senegal, and Uganda) and finds a negative effect on trust using a difference‐in‐difference framework. This study, therefore, is a significant advancement since it focuses on the impact of aid from China, a distinct donor (Hoeffler & Sterck, 2022), in a broader set of 31 SSA countries.…”

Aid and Governance: Impact of Chinese Aid on the Evaluation of Government Performance in Sub-Saharan Africa

“…Briggs (2018) finds interesting evidence based on a sample of 3 countries (Nigeria, Senegal, and Uganda) that aid reduces support in the form of votes for the incumbent government. Relatedly, Watkins (2021), based on the same sample of countries, also concludes that aid reduces' citizens' trust in the government. These conclusions are particularly concerning because governments need the support and cooperation of their citizens if they are to excel in meeting citizens' expectations.…”

“…Accordingly, existing studies find that foreign aid reduces trust in governments (Atitianti, 2022;Watkins, 2021). In addition, some studies postulate that the relationship between the state and its citizens is a form of "fiscal contract" in which the state, in exchange for the public goods and services it provides, receives complying attitudes from citizens in the form of tax payments and other civic responsibilities (Moore, 2008;Timmons, 2005).…”