Political Connections and Social Networks in Targeted Transfer Programs: Evidence from Rural Ethiopia

Despite increasingly large scale social protection programs in Africa, we have limited evidence on the local political economy of their allocation. We investigate community-based processes for food aid allocation and the role of political and social networks, using the case of Ethiopia in the aftermath of a serious drought in 2002. Local political authorities are in charge of food transfers, in terms of free food aid or food-for-work programs. We find that although targeting is clearly imperfect, free food aid is responsive to need, as well as targeted to households with less access to support from relatives or friends. We also find a strong correlation with political connections: households with close associates in official positions have more than 12 % higher probability of obtaining free food than households that are not well connected. This effect is large: someone without political connections has the same probability of getting food aid than someone more than twice as rich, but with these connections. The correlation with political connections is specifically strong in the immediate aftermath of the drought. Payment for food-for-work is also about a third higher for those with political connections. Although these programs appear to be responsive to need, in future it is crucial to look more closely at the local political economy of these programs.