Foreign Aid and Undeserved Credit Claiming

Abstract

Abstract Politicians in developing countries misuse foreign aid to get reelected by fiscally manipulating foreign aid resources or domestic budgets. Our article suggests another mechanism that does not require politicians to have any control over foreign aid in order to make use of it for electoral purposes: undeserved credit claiming. We analyze the conditions under which local politicians can undeservedly take credit for the receipt of foreign aid and thereby boost their chances of reelection. We theorize that politicians can employ a variety of techniques to claim credit for development aid even when they have little or no influence on its actual allocation. Using a subnational World Bank development program in the Philippines, we demonstrate that credit claiming is an important strategy to exploit foreign aid inflows and that the political effects of aid can persist even when projects are designed to minimize the diversion or misuse of funds.

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