Research

Existing research highlights that Chinese foreign aid is often vulnerable to elite capture in recipient countries. We examine whether such capture undermines environmental protection, proxied by whether aid projects are sited within protected areas (PAs). Our hypothesis is that leaders are more willing to authorize PA incursions when a project is located in their home region, because local interests that benefit from the project convert the resulting rents into political support for the incumbent. Using geocoded data on 3,675 Chinese infrastructure projects, we find no overall increase in PA encroachment associated with leaders’ birth regions. However, the aggregate null masks substantial geographic heterogeneity: in Africa, projects placed in a leader’s birth region are roughly 10 percentage points more likely to encroach on PAs than projects outside that region, whereas outside Africa the relationship reverses, with home-region projects less likely to violate PAs. Exploratory analyses suggest that domestic public opinion toward China and the political salience of ethnicity may help account for this divergence. We find no analogous effect for World Bank projects.

How does relief spending affect support for an incumbent politician? I argue that in contexts with low state capacity, where patrons (such as traditional leaders) wield significant influence in local politics, and where international donors visibly empower these patrons in the implementation of relief aid, such aid is likely to have a negative effect on political support for the incumbent government. This occurs because the national government receives little credit for the relief efforts, while being blamed if the patron under-performs in delivering the aid. I test this argument in the case of Sierra Leone during the Ebola epidemic, where international donors funded community care centers (CCCs) that heavily relied on the support of Sierra Leone’s paramount chiefs. Using geo-referenced Afrobarometer survey data from 2012 and 2015, I implement a difference-in-differences research design and find that CCCs reduced support for the incumbent president’s party by approximately 62.7 percentage points. These findings call for a reconsideration of the political consequences of relief aid and highlight the need for a nuanced understanding of its implementation dynamics.

Governments that rely on purchase subsidies to accelerate electric vehicle (EV) adoption must eventually phase them out. What happens to EV sales after a phase-out? There are two competing logics: A static view (removal raises prices, demand falls) and a dynamic view (announced cuts pull purchases forward, yielding a spike followed by a dip). I test these mechanisms in Germany’s Umweltbonus case, which saw an announced reduction (signaled July 2022, effective January 2023) and a sudden termination (signaled December 16, 2023, effective December 17, 2023). Using three synthetic-control estimators, I find that average post-phase-out effects are small and statistically insignificant across episodes. For the announcement episode, a pronounced December 2022 surge offsets modest declines in EV sales in early 2023. This is consistent with the dynamic view. For the sudden termination, aggregate nulls suggest limited price sensitivity among recipients, who are mostly high income individuals. This aligns with evidence from car model- and maker-level panels which reveal significant declines only for low-cost vehicles, but not for other segments. The policy implications of this is study are that well-signaled phase-outs can boost short-term sales without precipitating collapses, and that targeting matters—withdrawal effects hinge on who receives the subsidy.

Why do some foreign aid and foreign direct investment (FDI) projects cause political backlash from voters for politicians? Existing work attributes backlash to people’s dissatisfaction with project outcomes. However, these explanations cannot explain why sometimes even objectively successful projects can become a political liability for politicians. To explain this phenomenon, I argue that outcomes reveal new information about the quality of a development project that allows voter to assess whether their politician’s provided financial support to high-quality projects. I formalize this idea in a political accountability model. The model demonstrates that there are equilibria where outcomes are not necessary to cause political backlash. In fact, if the value of holding office is large enough, politicians can separate themselves from bad-type politicians by supporting every project. Negative outcomes only explain backlash if there is uncertainty about the quality of a project or a lack of information about the presence of financial support. These results are replicated in an extension with endogenous investment decisions. The paper further discusses what factors within the theoretical framework will influence the behavior of politicians to provide financial support to development projects and how accountability can affect the inflow of FDI and aid.

Can transparency mitigate the excessive use of investment incentives to attract new foreign direct investment (FDI) projects by elected officials? I argue that transparency does not necessarily discourage the use of investment incentives, but it forces politicians to focus them on attracting high-quality FDI projects. These are projects that have a high perceived effectiveness in increasing a community’s living standards. Voters prefer their representatives to emphasize high-quality over low-quality projects. Through transparency, voters can discern which projects receive incentives, thus incentivizing politicians to favor high-quality ones. I examined this using US greenfield FDI and incentive data from 2010 to 2019. My analysis indicates that high-quality projects are more likely to get incentives, especially in counties with a daily newspaper. Furthermore, counties with daily newspapers attract fewer, but higher quality, FDI projects. This implies transparency prompts politicians to prioritize project quality over quantity.