Zachary Christensen and Dr. Daniel Nielson, Political Science
Development scholars are currently debating whether or not the trillions of dollars given as foreign aid to developing countries have done any good. Some donors have heeded the contested advice from some scholars to reduce the amounts of aid they give to poorly governed countries. Now, many development advocates have begun challenging the quality of governance in donor agencies themselves. One of the biggest complaints is that donors are not transparent enough about their activities. My research seeks to measure the effects of donor transparency on recipient countries.
For this paper, I used the AidData dataset, recently published by the Political Economy of Development Lab at BYU and the College of William and Mary. This is the most comprehensive dataset of foreign aid projects in existence. It includes information about approximately one million projects worth about four trillion dollars. In this paper, we made a measurement of the level of donor transparency in a recipient country and measured its effects on the later levels of corruption in the country.
AidData includes 55 different fields providing information about each project. Donors vary significantly in the number of fields they publish for each project. We calculated the average number of fields published per project in each recipient country in each year. This number indicates the level of donor transparency in the country for that year. We then tested the effects of this number on a widely-used measure of corruption.
The best methods for evaluating this relationship were far more advanced than methods I was familiar with when I began this project. Fortunately, some other scholars were invited by my mentor to be coauthors on this paper. My coauthors are Prof. Dan Nielson (mentor), Richard Nielsen, a PhD student at Harvard University and Prof. Michael Tierney, a professor of Political Science at the College of William and Mary. Working with them has been a valuable experience and made the quality of this research infinitely better than it could have been by my own efforts.
The biggest methodological problem in this paper was ensuring that we were truly measuring the relationship between donor transparency and corruption levels rather than other factors. For example, donors may choose to publish fewer project details in a corrupt country because the risk is higher that their resources will be misused. We had to ensure that our methods controlled for such a possibility. We used a method called propensity score matching to control for this possibility. This technique involves looking for factors that influence the level of donor transparency. We then match countries that should have similar levels of donor transparency but have seemingly randomly differently level of donor transparency. If the country that had lower levels of donor transparency becomes more corrupt than the country that had higher donor transparency, we have evidence that donor transparency decreases corruption.
The results of our tests indicate that lower donor transparency levels encourage corruption. We subjected our findings to additional statistical tests and found that the results held. We are currently doing further tests to further assess the validity of our findings.
Our results suggest that donors should increase the level of transparency in their projects. Publishing project details may directly increase incentives for all parties to be more transparent and to work against corruption. Alternatively, the publication of project details could be a component of a broader effort of donors to decrease corruption levels. Regardless of the exact mechanism at work, we encourage donors to increase their transparency.
This paper was presented at the Aid Transparency and Development Finance Conference at Oxford University which was held in March 2010. Fortunately, I was able to attend the conference. Many of the top development scholars were at the conference and it was an invaluable experience for me to interact with them both in regards to my research and on a personal level. I was able to receive good suggestions on ways to improve the paper. I also was able to get valuable career advice. This experience reaffirmed my desire to pursue a career as a professor of political science. It also gave me a much better understanding of the nature of academic conferences and the process of presenting academic research.
Additionally, the paper will be presented at Harvard University at the conference for the International Political Economy Society, in November 2010. It also was recently accepted for presentation at the Political Economy of International Organizations Conference in Zurich, Switzerland in January, 2011. After these conferences, we will submit the article for publication in one of the leading political science journals. Our hope is that the findings of this paper will have an impact on scholarly discussions and policy debates in the future