EconPapers    
Economics at your fingertips  
 

Is Favoritism a Threat to Chinese Aid Effectiveness? A Subnational Analysis of Chinese Development Projects

Axel Dreher (), Andreas Fuchs (), Roland Hodler, Brad Parks, Paul Raschky () and Michael J. Tierney

No 13840, CEPR Discussion Papers from C.E.P.R. Discussion Papers

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 find 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.

Keywords: Africa; Aid effectiveness; China; Development finance; economic growth; favoritism; foreign aid (search for similar items in EconPapers)
JEL-codes: D73 F35 O19 O47 P33 R11 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-afr
Date: 2019-07
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed

Downloads: (external link)
http://www.cepr.org/active/publications/discussion_papers/dp.php?dpno=13840 (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: Is favoritism a threat to Chinese aid effectiveness? A subnational analysis of Chinese development projects (2019) Downloads
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:13840

Ordering information: This working paper can be ordered from
http://www.cepr.org/ ... rs/dp.php?dpno=13840

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 ().

 
Page updated 2019-11-19
Handle: RePEc:cpr:ceprdp:13840