Catholics versus Protestants: On the Benefit Incidence of Faith-Based Foreign Aid

We estimate the impact of a village-level assistance program run by the Evangelical Lutheran Church of Tanzania on schooling and literacy. These programs are partly funded by foreign aid from US and Scandinavian donors. Difference-in-difference estimates suggest that the program increased literacy by 15–20 percentage points and educational attainment by 10–15 percentage points, but only among Protestant children. Catholic children living in the same targeted villages were unaffected. Supplementary evidence implies that these results cannot be explained by observable differences at baseline, nor are Catholic households less inclined to accept development assistance in general. The combined results support the concern that faith organizations might overstate their ability to aid households of different faith.