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Does Foreign Aid Buy Hearts and Minds? Recipient Opinions about their Aid Donors

Does Foreign Aid Buy Hearts and Minds? Recipient Opinions about their Aid Donors. Gina Yannitell Reinhardt Bush School of Government Texas A&M University. What does foreign aid buy?. Economic Development

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Does Foreign Aid Buy Hearts and Minds? Recipient Opinions about their Aid Donors

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  1. Does Foreign Aid Buy Hearts and Minds?Recipient Opinions about their Aid Donors Gina Yannitell Reinhardt Bush School of Government Texas A&M University

  2. What does foreign aid buy? • Economic Development • Incentivize aid packages properly and target aid toward healthy policy environments in order to reduce poverty (Burnside & Dollar 2000; Easterly 2002; Collier 2007) • Policy and Political Outcomes • Target aid toward potential or current allies in order to garner favor or change behavior (Finkel, Perez-Linan, Seligson 2007; Goldsmith 2001; Knack 2004; Meernik, Kruger, & Poe 1998; McKinlay & Little 1977)

  3. What kind of policy outcomes? • Elite behavior (Alesina & Dollar) • UNGA voting correlations • Treaty membership • Democracy (Finkel et al) • Social capital • Freedom House/Polity indicators • Economic openness (Knack, Keefer) • FDI • Trade

  4. But there’s one more outcome… • What about hearts and minds? • “Why do they hate us?” • Muslims, Arabs, Latin Americans, Middle Easterners, Eastern Europeans, Southeast Asians, Chinese, … • Implicit connection between aid and public opinion

  5. How would Foreign Aid Win Hearts and Minds? • Directly • Aid  opinion of donor • Indirectly • Aid  poverty  opinion of donor • Aid  public goods  opinion of donor • Aid  corruption  opinion of donor • Aid  sovereignty  opinion of donor • Aid  elite ties  opinion of donor (conditioned on opinion of local elites)

  6. The Data • 18 Latin American recipients • Argentina, Bolivia, Brazil, Chile, Colombia, Costa Rica, Dominican Republic, El Salvador, Ecuador, Guatemala, Honduras, Mexico, Nicaragua, Panama, Paraguay, Peru, Uruguay, Venezuela • Latin Barometer • World Development and OECD Indicators • 1995-2005 • 3 Donors • US, Japan, EU (total bilateral aid) • Units of analysis: respondent, country-year

  7. The Question What is your impression of the United States / Japan / the European Union? • Very negative • Fairly negative • Neither positive nor negative • Fairly positive • Very positive

  8. A few beliefs • Both the individual and national levels are important in exploring the effect of aid on the opinions of donors • It is possible that there are within-country attributes that change the relationship between aid and opinions about donors • Therefore, the ideal model…

  9. Ideal Model yij = 0j + 1jXij + ij 0j = 00K + 01KZj + 0j 1j = 10 + 11Zj + 1j Where each individual’s opinions about each donor are conditional on certain individual-level variables, as well as certain national-level or country-year level variables. However…. Ordinal DV makes modeling complicated So…

  10. Very Basic Models ologit(yi) = 0 + Xi + i • individual opinion is conditioned on individual-level variables (opinion about national corruption, poverty, public goods, democracy, national pride) • controlling for sex, age, education level, economic/political indicators (owning tv, left-right placement) • fixed effects for countries and years, clustered by country-year yjy = 0 + Xjy + jy • aggregate national opinion is conditioned on national-level variables (indicators of corruption, poverty, public goods) • splitting sample based on sex, education level • controlling for economic/political indicators • fixed effects for countries and years

  11. Conclusions? • US: • Better perceptions of health care, democracy, national pride, self-identified Rightist (individual) • Increased education spending, increased trade with donor, left-leaning (national), conditional on college education • Aid matters negatively at the individual level only • Japan: • Male college graduates with better perceptions of education, health care, democracy, national pride, self-identified Rightist (individual) • Decreased polity2, left-leaning(national), conditional on college education • Aid matters positively at the individual level only • EU: • Male college graduates with better perceptions of education, health care, democracy, national pride, self-identified Rightist (individual) • Poverty indicators, health spending, trade with donor, decreased polity2, left-leaning(national), somewhat conditional on education • Aid matters positively at the aggregate level only

  12. However… • There are marked differences between opinion toward all three donors that depend on country and year • Future work will explore: • HLM to examine country-level variables • Individual information-gathering and political/economic awareness variables

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