Research

Great powers use multilateral development banks (MDBs) to disburse aid to politically important countries. Political lending can be also problematic for the operations of MDBs since politically motivated aid represent a higher default risk than aid projects chosen because of their merit. Bureaucrats at MDBs, therefore, face a dilemma. On the one hand, they want to please major shareholders by showing that they are willing to engage in political lending. On the other hand, they do not want to expose their MDB to too much risk. I argue that they will seek co-financing to share the risk of loans with other lenders. I test this theory in the context of the European Bank for Reconstruction and Development (EBRD) with newly collected loan-level data from 1996 to 2018. I find that share of co-financed loans in a country’s loan portfolio increases by 19 percentage points when the country serves in the UNSC. In line with the theory, I am able to attribute this effect to an increase in risky loans given to UNSC members.

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.

Studies have shown that governments with effective responses to natural disasters can increase political support. These studies implicitly assume that a national government controls the disaster relief response. This assumption is not always valid in the context of developing countries who receive a large portion of financial and material resources for disaster relief from international donors. In this study, I estimate the effect of foreign relief aid on the the approval of the incumbent president. I take advantage of the influx of relief aid into Sierra Leone during the Ebola Crisis in 2014-2016. Using the locations of community care centers (CCCs) that were promoted and implemented by international donors, such as UNICEF, I estimate whether people living near CCCs express different levels of support for the president than people living further away. Based on geo-referenced Afrobarometer survey data from 2012 and 2015, I implement a difference-in-differences strategy and find that people living near foreign relief aid express significantly lower levels of support for the incumbent. I estimate that CCCs reduced support for President Ernest Bai Koroma by approximately 54 percentage points. I attribute this decrease in support to the signal that CCCs send about the government’s lack of involvement in the fight against Ebola.

Are international courts effective in changing state behavior and fostering international cooperation? Conventional wisdom suggests that international courts can promote cooperation since governments suffer domestic audience costs from non-compliance. Despite the possibility of audience costs, there are still many governments refusing to comply with decisions of international courts. We argue that this is because unfavorable rulings can spark domestic backlash among citizens against international courts. As a result, non-compliance should increase domestic support, especially amongst highly-nationalistic individuals. We tested the argument using a conjoint survey experiment in China where we exposed respondents to a hypothetical case where the International Court of Justice (ICJ) issued an unfavorable ruling against China. We find that citizens prefer that the Chinese government does not comply with the ruling and these preferences are significantly stronger among individuals with strong nationalist sentiment. The results of our experiment highlight that, contrary to previous literature, international courts may not always induce international cooperation.