Does Aid Delivery Matter? The Role of Aid Delivery Mechanisms in Punishing Recipients, Credibly Signaling to Recipients, and Influencing Public Opinion

Abstract

Foreign aid decision making involves multiple stages, including decisions about which countries to allocate aid to and how to deliver that aid to those recipients. While aid allocation has been studied extensively, foreign aid delivery mechanisms remain underexplored. I investigate three research questions related to foreign aid delivery. Drawing on insights from principal-agent relationships, I first explore how donor governments choose to bypass poorly governed recipients and argue that donor aid agencies prefer channeling aid through donor-based NGOs. In my second article, I similarly rely on insights from principal-agent relationships and argue that donor aid agencies channel some, but not all aid money directly to strategically important recipient governments. Third, I examine whether aid delivery influences public opinion in the United States and find that information suggesting that aid is channeled through NGOs increases support for aid. To test my hypotheses, I construct a dataset, organized in directed dyads and spanning the years 2005 to 2018, housing ODA commitments pulled from the OECD’s Creditor Reporting System (CRS) database, and I conduct a survey experiment built using Qualtrics and administered via Amazon Mechanical Turk. Together, these findings affirm that donor aid agencies make different delivery decisions under different circumstances, and information about aid delivery influences public support for U.S. foreign aid.