Rewarding Women's Political Empowerment? the Effects of Gender Equality on Foreign Aid Allocation

Gender equality has long been recognized as a principal goal of socio‐economic development for developing countries. Nonetheless, little is known about whether foreign aid donors take gender egalitarianism into account and reward recipient countries with better gender equality performance. This study leverages a panel dataset of African countries and the case of Uganda to empirically examine the impact of women's political empowerment on aid allocation. The results show that an increase in the number of female cabinet members in core positions is positively associated with increased foreign aid. Furthermore, multilateral non‐state donors are more likely than bilateral state donors to reward improved women's political empowerment by allocating more gender‐specific aid. These findings are robust across various model specifications and after accounting for potential endogeneity. This study reveals the complex dynamics in the aid‐gender equality nexus, demonstrating that improved gender equality can serve as a rewarding signal for foreign aid.