Anders Olofsgård

We test the hypothesis that aid recipient governments are given greater discretion in distributing aid geographically for personal benefits during periods when they are non-permanent members of the United Nations Security Council (UNSC). More specifically, we analyze whether World Bank projects are targeted to regions in which the head of state was born, or to regions dominated by the same ethnic group as that of the head of the state. We find that all regions of a country on average receive more aid projects during UNSC membership years, confirming previous results with updated data. We find no evidence for additional World Bank projects going to leaders' birth regions during UNSC years. Turning to co-ethnic regions, we find that these regions receive fewer projects in normal times but during times of UNSC membership they receive significantly more projects and greater overall commitments. This effect is driven by loans from the IBRD arm of the World Bank. Importantly, looking at voting patterns in UNSC, we find a much stronger effect when focusing on countries that always vote in line with the US. This gives further credit to the interpretation of the result as a trade of favors between governments in donor and recipient countries catering towards domestic audiences.