The Elusive Quest for Aid in Uganda examines why, despite receiving over US$50 billion in development assistance since 1990, per-
capita income has stagnated and poverty remains above 20 percent. Using an original panel dataset that merges geolocated aid
projects with high-resolution administrative, conflict, and survey records (1990-2023), we test three dominant explanations: (i) donor
fragmentation and weak alignment with national priorities; (ii) elite capture and rent-seeking that divert resources from intended
beneficiaries; and (iii) external shocks—such as climate extremes and refugee inflows—that erode program effectiveness.
Difference-in-differences estimates show that districts receiving above-median per-capita aid experienced 0.5–0.7 percentage points
lower annual poverty reduction than under-aided districts, conditional on initial poverty and conflict exposure. Instrumental-variable
results that exploit exogenous World Bank disbursement rules reveal that each additional US$100 per capita of aid is associated with
a 3.1 percent increase in local government consumption but only a 0.08 percent increase in household consumption. Narrative
evidence from 86 elite interviews and 12 focus‐group discussions suggests that fragmented donor procedures create parallel
implementation structures, crowd out domestic tax effort, and facilitate rent extraction. A calibrated political-economy model indicates
that under current institutional quality, even optimally allocated aid would close at most one-third of Uganda’s poverty gap by 2030.

The findings imply that scaling aid without first strengthening domestic accountability mechanisms is unlikely to yield transformative
impacts, and they provide a quantitative benchmark for the governance reforms required to make external finance truly effective.