Does The one who pays the piper really call the tune? OECD and Chinese aid to infrastructure in Sub-Saharan Africa

Daniele Pianeselli

No 204, Departmental Working Papers of Economics - University 'Roma Tre' from Department of Economics - University Roma Tre

Abstract: This paper studies the role of donors’ interests, as opposed to recipient needs and merits, in the allocation of infrastructure aid to Sub-Saharan Africa, comparing OECD-DAC donors and China. The empirical analysis, over the period 2000-2012, clearly suggests that the main determinants that dictate aid flows differ between them. There is statistically significant evidence that, ceteris paribus, China has allocated aid according to political affinity, and natural resources endowment. However civil liberties and democracy have a significant role in screening aid allocation and Chinese interests reduced their effect during the last four years of analysis. On the other hand, donors’ interests did not generally have any role for OECD countries. Still, the evidence of a selective approach towards good economic and political governance, as well as recipients’ needs by these donors, is mixed and varies significantly among countries.

Keywords: foreign aid; aid allocation; infrastructures; China; emerging donors; Sub-Saharan Africa (search for similar items in EconPapers)
JEL-codes: F35 O11 O55 (search for similar items in EconPapers)
Date: 2016-01
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Persistent link: https://EconPapers.repec.org/RePEc:rtr:wpaper:0204

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