The Effects of Branded Foreign Aid: Evidence from Bangladesh

Many foreign aid agencies, such as the U.S. Agency for International Development (USAID), strive to make their efforts well known in the countries where they work, aiming to positively influence citizen attitudes toward the donor country. However, little rigorous evidence exists on how citizens in aid-receiving countries update their beliefs subsequent to encountering foreign-funded programming on-the-ground. Information about the foreign funding of development interventions might affect citizens’ attitudes toward the foreign donor, toward their own government, and/or toward the project itself.

To understand the effects of information about foreign aid on these attitudes, the research team embedded an experiment in a nationwide survey in Bangladesh. Respondents watched a video about the Smiling Sun Clinics, which have been funded by the United States since 1997. In the treatment condition, the video was branded with the USAID symbol, and respondents subsequently were informed about the history of U.S. funding for the health clinics. Respondents in both the treatment and control groups were then asked a variety of follow-up questions about their attitudes toward the United States, toward their own government, and toward the project.

The results show that only a small proportion of respondents understand the significance of the logo and that the information about foreign aid provision has overall small effects on perceptions that the United States has a positive influence on Bangladesh. There is no evidence of a potential negative externality in which information about foreign aid undermines domestic government legitimacy; instead there is evidence that information about U.S. foreign aid increases confidence in the local government among several subgroups of the population.

 CAS project