Aiding the Virtuous Circle? International Development Assistance and Citizen Confidence in Government in Bangladesh

Abstract

In areas of limited statehood, foreign development assistance often finances public goods and services. Do citizens attribute the presence of this development assistance to their government and thereby generalize about the legitimacy of their own government because of it? In an informational experiment embedded in a nationwide survey in Bangladesh, we find evidence in line with the argument that the presence of foreign aid signals government competence. The informational treatment effects are particularly large among the majority of respondents who perceive high levels of corruption in their country.

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