【AEW webinar】What Does Donor Conditionality Do? Causal Evidence from Kenyan Electrification & China’s Foreign Aid: Political Determinants and Economic Effects

  • 研討會日期 : 2022-08-18
  • 時間 : 08:30
  • 主講人 : Professor Edward Miguel
  • 地點 : Register and join online
  • 演講者簡介 : Professor Miguel received his Ph.D. in Economics from Harvard University in 2000. He is currently the Oxfam Professor of Environmental and Resource Economics and Faculty Director of the Center for Effective Global Action at the University of California, Berkeley. His main research focus is African economic development, including work on the economic causes and consequences of violence; the impact of ethnic divisions on local collective action; interactions between health, education, environment, and productivity for the poor; and methods for transparent social science research.
  • 演講摘要 : Multilateral organizations often impose procedural conditions on the use of financing they provide low- and middle-income countries, but what do these do in practice? While this question has been fiercely debated by governments, multilateral organizations, and academics, it is difficult to answer causally due to the endogeneity of project choice and the relatively small sample size of projects funded via multilateral financing. To provide causal micro-evidence on this topic, we leverage an unusual feature of Kenya’s recent nationwide electrification program: the quasi-random allocation of multilateral funding sources across nearby villages. We conduct detailed on-the-ground engineering assessments of transformers, conductors, and poles; collect minute-by-minute household-level outage and voltage data; and conduct household surveys on connection quality and usage. We find that relatively burdensome World Bank contracting procedures delayed the start of project construction at the average site by 10 months relative to African Development Bank funded projects. The World Bank’s pole inspections significantly improved on-the-ground pole quality; impacts on other construction quality and household outcomes are generally positive but modest in magnitude and not significant. To disentangle the roles of two key dimensions of donor conditionality—contracting steps versus audits—we implement a randomized audits scheme mimicking the latter, and find that this modestly improves household connectivity and electricity usage at relatively low cost and without further delays. In this context, combining rigorous audits with more streamlined upfront contracting could potentially improve project outcomes, though a less stringent contracting process may exacerbate the risk of leakage.
  • Working paper 演講者簡介 : Professor Mueller received his Ph.D. in Economics from Northwestern University in 2022. He is currently an Assistant Professor at National University of Singapore. His research fields are Development Economics, Political Economy, Economic History.
  • Working paper 演講摘要 : Can foreign aid foster economic development, even if it is given to satisfy objectives of the donor country? I study this highly debated question in the context of Chinese infrastructure aid, which has received much attention from policymakers. I link project-level aid data with administrative firm-level data from China to identify political determinants and economic consequences of Chinese aid. I document that when there is labor unrest in a Chinese prefecture, contracts for aid projects are allocated to state-owned firms in the prefecture, and employment by these firms increases. Connections between these firms and other countries mean that China’s response to domestic unrest affects the allocation of Chinese aid projects to recipient countries. I exploit this variation to develop a novel instrument for identifying the causal effects of Chinese aid on recipients. I find large positive effects on GDP, trade, consumption and employment.