Does it Matter Where Foreign Aid Comes From? An Experimental Test

Western actors are no longer the primary donors in developing countries. Authoritarian countries like China, the United Arab Emirates, Saudi Arabia, and Russia are increasingly present in every low and middle-income country, competing for geopolitical influence. This paper seeks to understand how the characteristics of donor countries shape citizens’ approval of their local politicians and foreign donors. The article argues that transparency in the aid project affects citizens’ perceptions of corruption, while the donor’s regime—whether democratic or authoritarian—signals to citizens whether they can voice their criticism. I employ an experimental approach on a sample of 2500 respondents in Serbia, a middle-income country in Europe that receives substantial foreign assistance from both democratic and authoritarian donors. The paper contributes by discerning and testing key theoretical mechanisms related to donor attributes rather than the donor country. The results show that citizens like transparent donors the most because they are the least likely to make corruption worse. On the other hand, citizens perceive that cooperation with democratic donors will not improve local elites’ accountability toward citizens. Yet, cooperation with authoritarian donors will further deteriorate political elites’ responsiveness toward citizens. Cooperation with authoritarian donors can, thus, decrease support for local political elites.