Foreign Aid and Conflict in the Democratic Republic of the Congo: Evidence from a Difference-in-Differences Study

Donors spend billions of dollars each year to spearhead a variety of development initiatives, such as eradicating poverty, improving health outcomes, and ending armed conflict. But does foreign aid lead to decreased conflict at the subnational level? This thesis interrogates how Accès aux Soins de Santé Primaires (ASSP), a $283 million project intended to provide healthcare to 8.6 million people across the Democratic Republic of the Congo (DRC), implemented between 2013 to 2018, affected conflict events and associated fatalities in the DRC ("Projet," 1; Annual Review - Jul. 2014, 4; 22). I hypothesize that an increase of aid to the Kasai-Occidental province would be associated with a decrease in conflict events and fatalities because such projects would increase the local population's support for the government, and thus dispel grievances against the state. In combination with analyzing primary sources from the ASSP program, I carry out a difference-in-differences (DID) analysis using a poisson model with two-way fixed-effects and cluster-robust standard errors. The DID points towards a statistically significant positive correlation between aid and fatalities and provides a statistically insignificant positive correlation between aid and conflict events. I explore how two umbrellas of aid-conflict mechanisms–fungibility and local population support–may explain this correlation, but due to a lack of qualitative evidence in support of either theory, I maintain that both categories of explanations ought to remain speculative.