This is a joint post with Stephanie Majerowicz.
Our colleagues Sarah Jane Staats and Connie Veillette have already explained how the recent election results might affect foreign aid. The 150 Account, which includes aid, is a prime target as Congress takes aim at the budget deficit. One silver lining may be that belt-tightening could also force compromise on long-overdue reforms.
But what can we learn from history?
How might aid levels change from a Congressional flip? My past study "Compassionate Conservatives or Conservative Compassionates?" with the World Bank’s Markus Goldstein, (un-gated CGD Working Paper here) analyzing U.S. aid to Africa from 1961-2000 found that ODA flows decrease significantly when the President and Congress are from different parties. This week we updated the data through 2008 and improved the model (to include 2-year lags to better capture the lengthy process from budget decisions-to-disbursement). This model predicts that this month’s political shift in Congress will, by 2012, lead to.... A drop of about US$900 million per year.
This result is driven by different parties in the White House and on the Hill--not because Republicans are structurally anti-aid. Yes, the GOP has plenty of vocal foreign aid critics, but the record is pretty clear. In fact, ODA flows to Africa are highest under all Republican control, followed by all Democratic control. The combination for the next two years--Democratic White House and Republican/split Congress--is actually the lowest configuration. (Email us for full regression results.)
Of course, history is not destiny. And our model is just a model. The real decisions will, fortunately, be made by people.