Demanding the Last Mile: Foreign Aid and Political Preferences in Pakistan

• In Event: Governance and Development at the State and Local Levels in South Asia

Abstract

Foreign aid is a key source of funding for public programs in the developing world. Yet, foreign aid can be manipulated by domestic politicians: as an unearned resource (Ahmed 2012), aid can encourage corruption, strategic allocation to electoral support-
ers or, in the least, some form of credit claiming by politicians who are not directly responsible for programs established by foreign aid. However, in addition to affecting politicians' incentives, aid can also change the preferences and behavior of its intended beneficiaries, i.e., poor voters in developing countries. Shifting the spotlight from recipient country elites to recipient country voters, I show that becoming eligible for foreign aid changes the latter's political preferences. I use a natural experiment provided by the eligibility criteria for a foreign aid-funded cash grant program in Pakistan - the Benazir Income Support Program (BISP) - to compare the political preferences of voters just-eligible and just-ineligible for BISP. I  nd that just-eligible voters are more likely to demand last mile services - which include the ability to easily access aid funds - than ask for conventional public goods. This is because the last mile delivery of foreign aid - from the determination of eligibility to the receipt of benefit by the intended beneficiary - is often filled with bureaucratic red-tape and bureaucratic hurdles. Using qualitative interview data, I also find that local politicians who are the target of these altered political demands, use last-mile service delivery as a distributive strategy that can help them win broad-based political support.

Author

• Syeda ShahBano Ijaz, Occidental College