Does Foreign Aid Buy Hearts and Minds? Recipient Opinions about their Aid Donors Gina Yannitell Reinhardt Bush School of Government Texas A&M University

What does foreign aid buy? Economic Development – Incentivize aid packages properly and target aid toward healthy policy environments in order to reduce poverty (Burnside & Dollar 2000; Easterly 2002; Collier 2007) Policy and Political Outcomes – Target aid toward potential or current allies in order to garner favor or change behavior (Finkel, Perez-Linan, Seligson 2007; Goldsmith 2001; Knack 2004; Meernik, Kruger, & Poe 1998; McKinlay & Little 1977)

What kind of policy outcomes? Elite behavior (Alesina & Dollar) – UNGA voting correlations – Treaty membership Democracy (Finkel et al) – Social capital – Freedom House/Polity indicators Economic openness (Knack, Keefer) – FDI – Trade

But there’s one more outcome… What about hearts and minds? “Why do they hate us?” – Muslims, Arabs, Latin Americans, Middle Easterners, Eastern Europeans, Southeast Asians, Chinese, … Implicit connection between aid and public opinion

How would Foreign Aid Win Hearts and Minds?  Directly  Aid  opinion of donor  Indirectly  Aid  poverty  opinion of donor  Aid  public goods  opinion of donor  Aid  corruption  opinion of donor  Aid  sovereignty  opinion of donor  Aid  elite ties  opinion of donor (conditioned on opinion of local elites)

The Data 18 Latin American recipients – Argentina, Bolivia, Brazil, Chile, Colombia, Costa Rica, Dominican Republic, El Salvador, Ecuador, Guatemala, Honduras, Mexico, Nicaragua, Panama, Paraguay, Peru, Uruguay, Venezuela Latin Barometer World Development and OECD Indicators Donors – US, Japan, EU (total bilateral aid) Units of analysis: respondent, country-year

The Question What is your impression of the United States / Japan / the European Union? – Very negative – Fairly negative – Neither positive nor negative – Fairly positive – Very positive

A few beliefs Both the individual and national levels are important in exploring the effect of aid on the opinions of donors It is possible that there are within-country attributes that change the relationship between aid and opinions about donors Therefore, the ideal model…

Ideal Model y ij =  0j +  1j X ij +  ij  0j =  00K +  01K Z j + 0j  1j =  10 +  11 Z j + 1j Where each individual’s opinions about each donor are conditional on certain individual-level variables, as well as certain national-level or country-year level variables. However…. Ordinal DV makes modeling complicated So…

Very Basic Models ologit(y i ) =  0 +  X i +  i individual opinion is conditioned on individual-level variables (opinion about national corruption, poverty, public goods, democracy, national pride) controlling for sex, age, education level, economic/political indicators (owning tv, left-right placement) fixed effects for countries and years, clustered by country-year y jy =  0 +  X jy +  jy aggregate national opinion is conditioned on national-level variables (indicators of corruption, poverty, public goods) splitting sample based on sex, education level controlling for economic/political indicators fixed effects for countries and years

Individual LevelOpinion about USOpinion about JapanOpinion about EU Aid from Donor-.009*** (.002).001***(.000).001 (.001) Corruption Increase.027(.019)-.005 (.018)-.001 (.019) Poverty Increase-.004 (.018)-.002 (.017)-.005 (.018) Education Increase.191*** (.019).055*** (.018).031* (.019) Health Care Increase.164*** (.019).094*** (.017).142*** (.179) Approve Democracy.070** (.033).101***(.030).235*** (.032) National Pride.097*** (.021).169*** (.019).128*** (.020) Male.063** (.030).191*** (.028).141*** (.029) Age.000* (.001)-.004*** (.001)-.001 (.001) College Grad.048 (.048).246*** (.045).364*** (.047) Television-.096** (.041)-.160*** (.040)-.181***(.006) Left/Right.053**(.041).029***(.006).016*** (.006) Countries Pos/NegNicaragua, El Salvador positive w.r.t. Argentina; else negative Bol,Col, DR, ElSal, Gua, Hon, Mex, Nic, Pan, Par, Per, Ven/Braz, Chile, Uru Col, DR, Ecu, ElSal, Hon, Ven/Braz, Mex, Pan, Uru N14,97317,93616,288 LR X *** *** *** LL Pseudo R

National LevelOpinion about USOpinion about JapanOpinion about EU Aid from DonorFem ( ) Male( ) Fem (***) Male(***) Poverty (gdppc)Fem ( ) Male( ) Fem (***) Male(***) Education SpendingFem ( ***) Male(***)Fem ( ) Male( ) Health SpendingFem ( ) Male( ) Fem ( ***) Male(***) Polity2Fem ( ) Male( )Fem (-*) Male(-*)Fem ( -***) Male(-***) Trade with DonorFem (***) Male(***)Fem ( ) Male( )Fem (***) Male(***) Life ExpectancyFem ( ) Male( ) Left/RightFem ( -***) Male(-***) Countries / YearsNicaragua, El Salvador, Mexico / else negative Bol,Col, DR, ElSal, Gua, Hon, Nic, Pan, Par, Per, Ven/Braz, Chile, Uru Col, DR, Ecu, ElSal, Hon, Ven/ Mex, Pan, Uru N F5.01*** 6.02***1.86* 2.29**6.28*** 4.58*** R2R

National LevelOpinion about USOpinion about JapanOpinion about EU Aid from DonorNo ( ) Coll( ) No (***) Coll(***) Poverty (gdppc)No ( ) Coll( )No ( ) Coll(-*)No (***) Coll( ) Education SpendingNo ( ***) Coll( )No ( ) Coll( ) Health SpendingNo ( ) Coll( ) No ( ***) Coll ( ) Polity2No ( ) Coll(-***)No (-*) Coll( )No ( -***) Coll (-***) Trade with DonorNo (***) Coll(***)No ( ) Coll( )No (***) Coll ( ) Life ExpectancyNo ( ) Coll( )No ( ) Coll(**)No ( ) Coll( ) Left/RightNo ( -***) Coll(-***)No ( -***) Coll( )No ( -***) Coll(-***) Countries / YearsNicaragua, El Salvador, Mexico, Paraguay / else negative Bol,Col, DR, ElSal, Gua, Hon, Nic, Par, Per, Ven/Braz, Uru Col, DR, Ecu, ElSal, Hon, Ven/ Mex, Uru N F4.53*** 3.91***2.31** *** 2.61** R2R

Conclusions? US: – Better perceptions of health care, democracy, national pride, self- identified Rightist (individual) – Increased education spending, increased trade with donor, left-leaning (national), conditional on college education – Aid matters negatively at the individual level only Japan: – Male college graduates with better perceptions of education, health care, democracy, national pride, self-identified Rightist (individual) – Decreased polity2, left-leaning(national), conditional on college education – Aid matters positively at the individual level only EU: – Male college graduates with better perceptions of education, health care, democracy, national pride, self-identified Rightist (individual) – Poverty indicators, health spending, trade with donor, decreased polity2, left-leaning(national), somewhat conditional on education – Aid matters positively at the aggregate level only

However… There are marked differences between opinion toward all three donors that depend on country and year Future work will explore: – HLM to examine country-level variables – Individual information-gathering and political/economic awareness variables