Does it Matter to Politicians Where Foreign Aid Comes From: Experimental Test with Elites

Do donor attributes affect members of parliaments' (MP) support for foreign aid projects? This study aims to understand whether members of parliament in developing countries show different levels of support toward aid projects funded by donors with different characteristics. Research shows that unlike traditional foreign donors like OECD countries, European Union (EU), World Bank, actors like China do not employ political conditionality, nor open bidding processes, have fewer transparency mechanisms in place, allow for more local ownership over projects, and negotiate projects mainly with the highest-level politicians excluding other lower-level bureaucrats. This study argues that three key characteristics of foreign donors are likely to matter for stakeholders in recipient countries (1) the presence or absence of political conditionality, (2) transparency mechanisms and (3) loans versus grants. To test these hypotheses, I utilize a survey experiment with vignettes, with stakeholders in Kosovo, a post-conflict and post-communist country that receives large amounts of financial assistance from actors like US, EU, Germany but also Turkey, United Arab Emirates. This analysis contributes to existing research by testing key mechanisms related to donor attributes and politicians' incentives in recipient countries. Previous research does not differentiate between the incentives of elites based on their party position—i.e., incumbent versus opposition—nor how this impacts their willingness to cooperate with various foreign donors. This study addresses this gap.