Abstract. Foreign aid is an important financer of development projects in many countries but very little is known about aid’s impact on the bureaucrats who implement aid projects and make states work. Indeed, while other work has focused on aid effectiveness, much of this work has omitted a crucial intervening variable: the effect of an aid economy on those who work with it. My book project is novel in linking aid effectiveness to bureaucratic performance by focusing on how aid alters bureaucrats’ incentives and performance. To unpack these effects, I use both qualitative and quantitative data collected over 8 months of fieldwork in Uganda. My findings reveal that aid can distort bureaucrats' incentives in a way that undermines overall bureaucratic effectiveness and call attention to the need for a deeper interrogation of the mechanisms underlying aid effectiveness.

Chapter 2: The Political Economy of Aid Allocation in Recipient Governments

I interviewed 40 bureaucrats to understand how they view foreign aid and its impact on their work within government departments. The findings reveal that when departments receive funding from donors, bureaucrats tend to focus more on aid projects than routine government tasks. Even though bureaucrats sometimes feel aid projects don't have a lasting impact and criticize donor priorities, they heavily depend on aid to boost departmental and personal resources. This reliance creates a cycle where departments consistently seek donor funding, diverting attention from traditional Weberian goals like career advancement. These dynamics contribute to organizational drift, including increased complexity, fragmentation, and tension within departments.

Chapter 3: The Impact of Foreign Aid on Bureaucratic Performance

In this chapter, I argue that as financial incentives from donor funding increase, bureaucrats become more willing to sacrifice social preferences like autonomy, equity, and coordination with peers. To test my argument, I use survey and experimental data collected from 559 bureaucrats across six primary ministries in Uganda's central government. The results show that increased financial benefits do not displace bureaucrats’ social preferences. However, bureaucrats are willing to shift effort from their regular government duties to aid projects when financial benefits are relatively high. Notably, when there is equity, bureaucrats are more willing to work harder in their departments. The findings highlight the dual impact of donor-bureaucrat dynamics: social preferences are susceptible to aid-induced distortions, and these distortions can be costly for aid implementation given that bureaucrats then require high prices to increase effort on aid projects. Simultaneously, the payment of such high prices undermines government programming. My study emphasizes the need to consider domestic actors in evaluating aid effectiveness, the micro-effects of aid on state capacity, and the interplay of incentives and social preferences in understanding bureaucratic motivation.