Is Favoritism a Threat to Chinese Aid Effectiveness? A Subnational Analysis of Chinese Development Projects
Axel Dreher, Andreas Fuchs, Roland Hodler, Bradley Parks, Paul A. Raschky and Michael J. Tierney
Published in: World Development 139: 105291, March 2021
Abstract
Chinese aid comes with few strings attached, allowing recipient country leaders to use it for domestic political purposes. The vulnerability of Chinese aid to political capture has prompted speculation that it may be economically ineffective, or even harmful. We test these claims by estimating the effect of Chinese aid on subnational economic development - as measured by per-capita nighttime light emissions - and whether this effect is different in politically favored jurisdictions than in other parts of the country. Contrary to the conventional wisdom, we do not nd that the local receipt of Chinese aid undermines economic development outcomes at either the district level or provincial level. Nor does political favoritism in the allocation of Chinese aid towards the home regions of recipient country leaders reduce its effectiveness. Our results - from 709 provinces and 5,835 districts within 47 African countries from 2001-2012 - demonstrate that Chinese aid improves local development outcomes, regardless of whether such aid is allocated to politically consequential jurisdictions.
Published paper
Supplementary material
Working paper (July 2019)
Dataset
Presentations at conferences and workshops
See also
Axel Dreher, Andreas Fuchs, Roland Hodler, Bradley Parks, Paul A. Raschky and Michael J. Tierney
Published in: World Development 139: 105291, March 2021
Abstract
Chinese aid comes with few strings attached, allowing recipient country leaders to use it for domestic political purposes. The vulnerability of Chinese aid to political capture has prompted speculation that it may be economically ineffective, or even harmful. We test these claims by estimating the effect of Chinese aid on subnational economic development - as measured by per-capita nighttime light emissions - and whether this effect is different in politically favored jurisdictions than in other parts of the country. Contrary to the conventional wisdom, we do not nd that the local receipt of Chinese aid undermines economic development outcomes at either the district level or provincial level. Nor does political favoritism in the allocation of Chinese aid towards the home regions of recipient country leaders reduce its effectiveness. Our results - from 709 provinces and 5,835 districts within 47 African countries from 2001-2012 - demonstrate that Chinese aid improves local development outcomes, regardless of whether such aid is allocated to politically consequential jurisdictions.
Published paper
Supplementary material
Working paper (July 2019)
Dataset
Presentations at conferences and workshops
- Erich-Schneider-Seminar, University of Kiel, Germany (01/2019)
- Seminar at the University of Siegen, Germany (01/2019)
- Séminaire DIAL, Université Paris-Dauphine, France (06/2018)
- Macroeconomics, Rationality, and Institutions Workshop, Sapienza University of Rome (12/2017)
- Development Economics Network Berlin (DENeB), Berlin, Germany (11/2017)
- Workshop BNUBS (Lyon)-GATE (Beijing)-AWI (Heidelberg), Heidelberg University, Germany (07/2017)
- Research Seminar of the Mercator School of Management, University of Duisburg-Essen, Germany (01/2017)
- EUDN Scientific Conference, University of Bonn, Germany (12/2016)
- Research Seminar in Economics, University of Passau, Germany (10/2016)
- Research Seminar in Economics, University of Western Australia, Perth, Australia (10/2016)
- Villanova School of Business Department of Economics Seminar Series, Villanova University, USA (09/2016)
- Annual Meeting of the American Political Science Association, Philadelphia, USA (09/2016)
- China Economics Summer Institute, Hong Kong University of Science and Technology, China (08/2016)
- Workshop on "Global Challenges,'' Università degli Studi di Milano Bicocca, Milan, Italy (06/2016)
- Development Economics Conference "Göttinger Schule,'' University of Goettingen, Germany (06/2016)
See also
