Recent studies suggest that development aid is not always directed towards the poorest areas within countries, contrary to what we would expect if the objective is to end poverty. In this paper we document a positive correlation between the location of historical Christian missions and the within-country allocation of World Bank and Chinese financed development projects in Africa. The correlation is conditioned on observable geographical and historical factors that have shaped missionaries’ settlement decisions. Christian missions often included health and education facilities, and we consider them to be ancestors of modern micro-development projects. We interpret our finding as evidence of historical path dependence in the spatial distribution of aid, which can be rationalized by assuming decreasing unit cost of implementing aid at the local level. We do not find evidence that the results are driven by donor preference for Christian or Westernized areas.
Funding: This work was supported by the Centre of Equality, Social Organization and Performance (ESOP). ESOP is supported by the ResearchCouncil of Norway through its Centres of Excellence funding scheme, project number 179552.