Can Aid Buy Foreign Public Support? Evidence from Chinese Development Finance

Lukas Wellner, Axel Dreher, Andreas Fuchs, Bradley Parks and Austin Strange

No 17128, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: Bilateral donors use foreign aid to pursue soft power. We test the effectiveness of aid in reaching this goal by leveraging a new dataset on the precise commitment, start, and end dates of Chinese development projects. We use data from the Gallup World Poll for 126 countries over the 2006-2017 period and identify causal effects with (i) an event-study model that includes high-dimensional fixed effects, and (ii) instrumental-variables regressions that rely on exogenous variation in the supply of Chinese government financing over time. Our results show that the completion of Chinese development projects increases popular support for the Chinese government in recipient countries. In the short run, this effect increases with the size of the project and the generosity of the financial commitment; in the longer run, it is lower among people who live in close proximity to completed Chinese development projects. Analyzing the impact of Chinese projects on global perceptions, we find that Chinese development projects create a more favorable public opinion environment for China among countries in Africa, potential "swing states" in the United Nations General Assembly, and countries with higher baseline (ex ante) levels of public support for the Chinese government.

Keywords: Development finance; Foreign aid; Aid events; Public opinion; Government approval; Soft power; China; Gallup world poll (search for similar items in EconPapers)
JEL-codes: F35 F59 H73 H77 O19 P33 (search for similar items in EconPapers)
Date: 2022-03
References: Add references at CitEc
Citations:

Downloads: (external link)
https://cepr.org/publications/DP17128 (application/pdf)
CEPR Discussion Papers are free to download for our researchers, subscribers and members. If you fall into one of these categories but have trouble downloading our papers, please contact us at subscribers@cepr.org

Related works:
Working Paper: Can Aid Buy Foreign Public Support? Evidence from Chinese Development Finance (2022)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:cpr:ceprdp:17128

Ordering information: This working paper can be ordered from
https://cepr.org/publications/DP17128

Access Statistics for this paper

More papers in CEPR Discussion Papers from C.E.P.R. Discussion Papers Centre for Economic Policy Research, 33 Great Sutton Street, London EC1V 0DX.
Bibliographic data for series maintained by ().