Win-Win? The China-Pakistan Economic Corridor and its Impacts on the Pakistani Economy

David Landry ()
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David Landry: Duke University & Duke Kunshan University

No 582, Working Papers from Center for Global Development

Abstract: Chinese mammoth investment projects abroad, and especially those under the Belt and Road Initiative (BRI) umbrella, are receiving heavy scrutiny in academic and policy circles. However, there is insufficient empirical evidence to evaluate their impact. This paper employs a difference-in-differences approach and a pair of new datasets on government spending and economic activity compiled by the World Bank to examine the local impacts of the Chinese-Pakistan Economic Corridor in Pakistan. It finds that the 2013 announcement of CPEC was accompanied by a disproportionate increase in government spending in CPEC districts. However, in the six years after it was first announced, CPEC has not directly contributed a significant increase in economic activity in the districts along its path.

Keywords: Development Finance; Foreign Direct Investment; Public Spending; Economic Development; China; Pakistan (search for similar items in EconPapers)
Pages: 27 pages
Date: 2021-05-20
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Persistent link: https://EconPapers.repec.org/RePEc:cgd:wpaper:582

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