Domestic Politics and Changes in Foreign Aid Allocation: The Role of Party Preferences

Published date01 June 2018
Date01 June 2018
AuthorZachary D. Greene,Amanda A. Licht
Subject MatterArticles
Political Research Quarterly
2018, Vol. 71(2) 284 –301
© 2017 University of Utah
Reprints and permissions:
DOI: 10.1177/1065912917735176
Foreign aid offers a potent instrument to incentivize recip-
ient leaders’ behavior, but its effectiveness has long been
questioned.1 For many scholars, aid’s patchy record in
promoting democratization, growth, and cooperation
stems from moral hazard and geopolitics: donors’ strate-
gic incentives diverted aid flows from the neediest or most
deserving states and damaged their credibility. Analysis
focused on which donor-states fell into this trap
(Berthélemy and Tichit 2004), and on aid’s expanded util-
ity after the Cold War (Bearce and Tirone 2010). New
research, however, seeks to explain variation in aid efforts
within countries over time. These studies open up the
democratic donor-state, substituting the domestic political
preferences of governments for the amorphous “national
interest,” but find mixed support thus far (e.g., Dreher,
Nunnenkamp, and Schmaljohann 2015; Fleck and Kilby
2010; Noël and Therién 1995). Yet foreign aid allocations
likely reflect the goals of domestic decision-makers, and
consequently, the preferences of key actors should influ-
ence foreign aid outputs (Dreher, Nunnenkamp, and
Schmaljohann 2015; Fleck and Kilby 2010; Milner and
Tingley 2010; Tingley 2010).
We consider how partisan ideological preferences
affect donors’ allocation decisions across the array of for-
eign assistance sectors. We argue that parties’ preferences
predict their approach to foreign affairs. Changes in the
preferences of governing parties produce shifts in alloca-
tion across aid types. Focusing on the effect of ideology
on the most frequently used aid sectors allows detailed
predictions that would be obscured by aggregate trends.2
Our perspective dovetails with studies of party politics
and public policy, where scholars recognize that policies
and budgets reflect political processes (Bevan and Greene
2016; Green-Pedersen and Mortensen 2010; Soroka and
Wlezien 2010; Whitten and Williams 2011). Elections
and coalition negotiations create governments with vary-
ing preferences over multiple dimensions of politics
(Laver and Shepsle 1996).
Our theory relaxes strong assumptions about tradi-
tional left–right (RILE) ideology by introducing a second
dimension: internationalism. This dimension captures
governments’ preferences for engaging and influencing
foreign countries relative to isolationism. This dimension
has become increasingly salient in donors’ domestic poli-
tics. Internationalism varies across parties with otherwise
735176PRQXXX10.1177/1065912917735176Political Research QuarterlyGreene and Licht
1University of Strathclyde, Glasgow, UK
2Binghamton University, NY, USA
Corresponding Author:
Zachary D. Greene, School of Government and Public Policy,
University of Strathclyde, 16 Richmond St., Glasgow G1 1XQ, UK.
Domestic Politics and Changes in
Foreign Aid Allocation: The Role
of Party Preferences
Zachary D. Greene1 and Amanda A. Licht2
Resources for foreign aid come under attack when parties that care little for international affairs come to power.
Internationally focused parties of the left and right, however, prefer to use aid as a tool to pursue their foreign
policy goals. Yet varying goals based on left–right ideology differentiate the way donors use foreign aid. We leverage
sector aid to test hypotheses from our Partisan Theory of Aid Allocation and find support for the idea that domestic
political preferences affect foreign aid behavior. Left-internationalist governments increase disaster aid, while
parochial counterparts cut spending on budget assistance and aid that bolsters recipients’ trade viability. Conservative
governments favor trade-boosting aid. We find consistent, nuanced, evidence for our perspective from a series of
Error Correction Models (ECMs) and extensive robustness checks. By connecting theories of foreign aid to domestic
politics, our approach links prominent, but often disconnected, fields of political research and raises important
questions for policymakers interested in furthering the efficacy of development aid.
foreign aid allocation, donor ideology, internationalism, sectoral aid, domestic politics, party politics
Greene and Licht 285
similar ideology and within parties over time. Donald
Trump’s views on aid and trade, for example, strongly
contrast those of the 2012 Republican Party candidate,
Mitt Romney (The New York Times 2012; Thoma 2016).3
The absence of this dimension from prior work may par-
tially explain inconsistent results across analyses using
RILE dichotomies and aggregate aid flows (e.g., Dreher,
Nunnenkamp, and Schmaljohann 2015; Fleck and Kilby
2010; Noël and Therién 1995).
Adding internationalism allows us to identify prefer-
ences of four ideal types of parties: left-pro-international,
left-anti-international, right-pro-international, and right-anti-
international. We predict that internationalist governments
likely use foreign aid as a tool of influence. Subsequent
changes in aid allocations will reflect variation in prefer-
ences, as governments choose types of recipients and aid
channels. Thus, we derive predictions regarding aid provi-
sion across stated purposes.4 For example, a country can tar-
get aid to civil society or economic sectors depending on
their RILE preferences for policy.
We test hypotheses from the Partisan Theory of
Foreign Aid Allocation with data on parties’ priorities for
foreign aid from the Comparative Manifestos Project
(CMP), government composition from ParlGov (Döring
and Manow 2016), and aid allotments from AidData
(Tierney et al. 2011).5 Analysis of twenty-eight donor
countries over nearly forty years supports an explanation
that incorporates ideological preferences. Internationalist
governments pursue economic agendas through aid allo-
cations that reflect their partisan preferences. We submit
our results to a wide range of robustness checks, includ-
ing alternate modeling and measurement strategies in the
online appendix.
This study holds implications for theories of political
development, foreign influence, partisan politics, and
democratic accountability. Our theory suggests an addi-
tional explanation for aid’s failure to induce behavior
from recipient states. This lack of success partially
reflects aid’s politicized nature and the conditions under
which it is given. The donor credibility problem, here,
stems from domestic political competition rather than the
global balance of power. The timing, amount, and nature
of aid allocated should not depend on the politics of the
donor country, lest recipients perceive funds as tools of
political manipulation.
Furthermore, theories of representative democracy
require representatives to pursue campaign statements.
Studies often find weak evidence of partisan priorities
affecting policy change (e.g., Bevan, John, and Jennings
2011). Our findings, however, suggest parties pursue
their stated goals. Previous research may miss nuanced
effects of preferences on foreign policy, as we find that
short- and long-term effects may differ. Moreover, for-
eign aid’s effect on goals such as democracy promotion
and developing foreign markets for trade manifest over
time. More broadly, evidence suggests partisan govern-
ments pursue priorities consistent with their electoral
statements, even in the realm of foreign policy.
Preferences and Government Policy
Scholars link parties’ ideology to government behavior.
Research predicts budgets and policy via either the goals
of parties’ supporters or statements from their campaigns
(Hibbs 1977). While much research emphasizes competi-
tion on the traditional RILE economic dimension of poli-
tics, parties stake out independent positions on a diversity
of issues, including the environment, immigration, and
foreign intervention (de Vries and Hobolt 2012; Lowe
et al. 2011). Domestic electoral competition forces gov-
ernments to outline preferences on diverse issues, while
incentivizing a reputation of accountability for their
Parties balance their sincere preferences against
office-seeking goals (Strøm 1990). Electoral competition
encourages parties to shift preferences in response to
public opinion (Adams, Haupt, and Stoll 2009), issue-
focused parties’ success (Meguid 2008), competitors’
policy changes, and economic conditions (Williams,
Seki, and Whitten 2016). Voters’ responses to these shifts,
however, are often delayed (Somer-Topcu 2009).
Electoral and intra-party motives drive party mani-
festo content. Parties select issues because of historically
positive associations (Egan 2013; Petrocik 1996), or to
match traditional supporters’ preferences (Hibbs 1977).
Ideologically extreme and governing parties incorporate
new topics (de Vries and Hobolt 2012; Schumacher, de
Vries, and Vis 2013). Parties emphasize topics to appear
responsive (Sigelman and Buell 2004; Spoon and Klüver
2014). Past government experience, economic condi-
tions, and the diversity of their parliamentary delegation
and leadership all influence the breadth of issues in par-
ties’ campaigns (Greene 2016; Greene and O’Brien
Varied motives drive parties to address topics beyond
the traditional RILE cleavage, such as foreign policy. The
electoral context encourages parties to focus on economic
foreign policy, or broader goals (e.g., Greene 2016;
Hellwig 2012; Williams, Seki, and Whitten 2016).
Distinguishing preferences on such issues from those on
the economic dimension allows researchers to account
for the complexity of party competition and policy change
inside democracies.
On entering office, parties pursue policy consistent
with electoral statements to maintain a positive reputa-
tion. Research connecting electoral statements to behav-
ior in government describes a complex linkage between
parties’ goals and policy-making behaviors. For example,

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