Bureaucratic Politics and Aid Allocation: Evidence From the US Agency for International Development

We examine the impact of bureaucratic politics within the US Agency for International Development on the allocation of its development assistance. Existing studies of aid allocation have focused on donor interests, recipient needs, and recipient merit without accounting for the bureaucratic decision-making process that helps determine these budgets. We theorize that most field-based development officials seek to maximize their country's budgets and that better-staffed country offices have greater capacities to do so. We test this theory using novel data on USAID staffing patterns between 1980 and 2020 and leverage staff rotation patterns using an instrumental variable strategy. Consistent with our theory, results show that increasing the number of USAID staff in a country mission led to substantial increases in aid allocation. We draw on key informant interviews to explore mechanisms underlying this effect. Interviews highlight the close relationships between country-level aid allocation and two country office capacities which better staffing tended to increase: (1) understanding of the USAID budget process and (2) ability to move through time-consuming procedures related to funding commitment and disbursement. The findings have important implications for debates regarding the allocation of development assistance as well as broader discussions on bureaucratic politics in US foreign policy.