The Political Economy of Donor Control and Elite Capture in Arsenic Mitigation in Bangladesh

Abstract

Numerous parts of the developing world are afflicted by pollution and poison from both man-made and natural sources. Efforts to mitigate these environmental contaminants are often inherently political, and it is difficult to discern if those efforts reach all intended beneficiaries. We argue that as spatial precision increases, it is likely that donors lose control of foreign aid. Using geo-spatial data, we find evidence in Bangladesh that efforts to mitigate groundwater arsenic are generally directed to broad areas with higher levels of contamination. However, within those areas, we find that mitigation measures supported by foreign aid only reduce arsenic when they are located near (politically important) exporting firms. We argue that this supports a political economy rationale wherein donors may be able to target their assistance at a mezzo level, while powerful socio-economic interests are able to capture and direct resources at a micro level, potentially exacerbating intra-country inequality.