Domestic Support for Foreign Aid

In this paper, I present a theory of domestic support for foreign aid in the U.S. by focusing on the role played by American aid contractors or development firms in domestic politics. USAID delivers foreign aid to recipient countries through contracts with private for-profit development firms, most of which originate from America. This paper argues that these domestic firms play a critical role in promoting domestic support for foreign aid by creating distributional effects and disseminating information through lobbying. The information includes not just the importance of the foreign aid but also the distributive benefits toward legislators' districts. In fact, development firms have formed a coalition to lobby politicians and promote pro-foreign aid-related bills effectively. Analyzing district-level contract data and firm-level lobby data from the 111th to the 115th Congress, I found that the district-level allocation of contracts is positively associated with the frequency of sponsorship for pro-foreign aid-related bills.