The cyclicality of government foreign-aid expenditure: voter awareness in “good” times and in “bad”

Abstract

While it has been argued that the cyclicality of government spending likely depends on the intensities of political pressure to increase expenditure, in economic upturns and downturns, it is important to explore the determinants of changes in the strengths of those pressures. This paper is the first (to our knowledge) to focus on the relevance of systematic changes in voter awareness of government spending. Predictions of the impact of changes in awareness are tested with reference to 23 OECD donor countries' foreign aid expenditures over the 1999-2015 period. The evidence offers insights into the discretion governments exercise when "fiscal illusion" increases and into the policy implications of systematic changes in voter awareness (in "good" times and in "bad").

Public Support for Development Aid during the COVID-19 Pandemic

“…If the goal is to understand the effect of such crises on aid policy, it would be useful to treat such crises as donor-side crises as well and examine them as such. For the other, a growing strand in the literature has convincingly demonstrated that public opinion can play a crucial role in shaping the aid policies of traditional (democratic) donors, especially when public attention is heightened (Van Belle 2004, Milner 2006, Eisensee & Str ömberg 2007, Nielsen 2013, Heinrich et al 2018, Abbott & Jones 2020.…”

“…support for aid that generates easier access to natural resources and greater counterterrorism cooperation. Third, when deciding whether or not to support aid, they consider how costly aid is and how many resources are available to the government to spend on policies, including foreign aid (Heinrich et al 2016, Abbott & Jones 2020. While citizens generally do not have a good idea of how large their government's budget is, how the economy is actually faring, or what the size of their government's aid spending is, 12 they still hold beliefs over these quantities, which in turn influence their policy preferences (Stevenson & Duch 2013, Gilens 2001, Scotto, Reifler, Hudson & vanHeerde Hudson 2017.…”

“…For more evidence, direct and indirect (e.g. economic growth rates), see Abbott & Jones (2020), Dabla-Norris et al (2015), van Bergeijk (2012), Gravier-Rymaszewska (2012), and Mendoza, Jones & Vergara (2009). It is worth noting that Fuchs, Dreher & Nunnenkamp (2014) report they they do find financial crises to be robustly associated with donors' aid budgets.…”

“…Aid to fight COVID-19 abroad could also have tangible health benefits at home. Realizing that donor and recipient countries are entangled via the high transmissibility of COVID-19, voters may favor assisting poorer countries in order to dampen the impact of a second wave (Steele 2017), a rationale for development assistance called "targeted development" 4 Specifically on the link between public opinion and aid policy, see: Milner (2006), Eisensee & Str ömberg (2007), Milner & Tingley (2010), Van Belle (2004), Nielsen (2013), Heinrich (2013), Heinrich, Kobayashi & Long (2018), and Abbott & Jones (2020). (Bermeo 2017).…”

Together or Not? Dynamics of Public Attitudes on UN and NATO

“…Yet, the costs involved in the provision of public goods are salient in bleak economic times. When the economy performs poorly, voters, as taxpayers, become more aware of government spending (Abbott and Jones, 2019; Peacock and Wiseman, 1961) and are less sympathetic of international endeavors that are not perceived as directly benefiting the home country economically, for instance foreign aid (Heinrich et al, 2016). Given that IGOs are funded by member states, and such contributions impose expenditures on the domestic budget and increase tax burdens, during economic downturns voters become more critical of membership dues that perceivably divert resources away from other, more pressing services.…”