AIDING STATE FRACTURE
How Donor-Funded Projects Erode State Capacity

SUMMARY

Foreign aid is entering its most uncertain period in decades. After more than seventy-five years of criticism over effectiveness, dependency, and ownership, the aid system is now being reshaped by budget cuts, geopolitical competition, and renewed skepticism about what external assistance can achieve. This book takes a fresh perspective on that debate by examining how donor-funded projects reshape the bureaucracies through which states govern. Focusing on project aid across aid-dependent countries, and in particular Uganda, it shows how external resources reorganize the administrative state and weaken the foundations upon which competent bureaucracies are built.

I argue that project aid creates a two-principal problem inside aid-dependent states. Although civil servants are accountable to domestic political and administrative authorities, donor-funded projects bring their own priorities, deadlines, reporting systems, incentives, and career opportunities. Drawing on interviews, descriptive survey data, and survey experiments with Ugandan officials across multiple hierarchies, ministries, and agencies, I show how donor projects enter ministries on terms set by external funders and delinked from regular state programming, turn project assignments into sites of organizational politics, pull capable officials toward better-paid project work, and divide departments between project insiders and those left to carry the bulk of routine government tasks. Across aid-recipient countries, the book shows that governments more reliant on project aid tend to have more politically driven hiring and less effective public administration.

The book makes theoretical and empirical contributions to research on foreign aid, bureaucratic politics, state capacity, and public-sector management. It shows that aid can produce visible project outputs while weakening the organizational foundations of state-led development: meritocratic recruitment, coordinated work, equitable incentives, and bureaucratic commitment to government priorities. By looking below national indicators and beyond donor evaluations, the book offers a new way to assess aid effectiveness and practical lessons for donors and governments seeking to strengthen rather than fracture public institutions.