15:30 - 17:45
Friday-Panel
Chair/s:
Rabia Malik
Discussant/s:
Rabia Malik, Jens Eger
Meeting Room B

Ringailė Kuokštytė, Vytautas Kuokštis
Drivers of bilateral aid of EU member states: Evidence from a time-series cross-section analysis

Daniela Donno, Sarah Bush, Pär Zetterberg
Rewarding Women's Rights in Dictatorships

Cleo O'Brien-Udry
Aid, Blame, and Backlash: The Political Economy of Unpopular Aid

Lennart Kaplan
'Reversed favoritism' -- Resolving the puzzle of discriminatory taxation in African agriculture
"Reversed favoritism'" -- Resolving the puzzle of discriminatory taxation in African agriculture
Lennart Kaplan
Georg-August University Göttingen
Deutsches Institut für Entwicklungspolitik

The political economy literature highlights the redistribution of resources to political support groups -- often along regional or ethnic lines -- as a dominant feature of political systems. Against this assumption, Kasara (2007) documents a puzzling result of discriminatory rent extraction by political leaders from farmers in their ethnic home region.
Linking a new database on ethnic and regional affiliation of political leaders to fine-grained survey data, I disentangle ethnic and regional affiliations and show that their intersection explains the phenomenon which I will label in the following ``reversed favoritism.'' More specifically, I provide evidence that agricultural price hikes indeed do not reduce poverty among co-ethnic farmers in the leader birth region. Results indicate that farmers are aware about the unfavorable taxation as they express lower tax support. Yet, leaders seem to act politically rational as they only apply this treatment in regions where they enjoy high trust. An exploratory analysis suggests that the counter-intuitive support of discriminatory policies can be explained by transfers in other arenas, namely development aid.