A talk by Axel Dreher
The Political Economy of Chinese Aid
We investigate the political economy of Chinese foreign aid allocation and effectiveness. To this end, we introduce a new data set of official financing from China to 138 countries over the 2000-2014 period. We use these data to investigate whether China's foreign aid is prone to capture by political leaders of aid-receiving countries examining whether more Chinese aid is allocated to the birth regions of political leaders and regions populated by the ethnic groups to which leaders belong. Our results show that when leaders hold power their birth regions receive substantially more funding from China than other sub-national regions. We also find - less robust - evidence that African leaders direct more Chinese aid to areas populated by individuals who share their ethnicity.
We use the new data to investigate whether and to what extent Chinese aid affects economic growth and spatial inequality in recipient countries, at the national and sub-national level. Our results show that Chinese aid improves development outcomes.
Professor Axel Dreher is Professor of International Economic and Development Policy at Ruprecht-Karls University Heidelberg. He is editor of the Review of International Organizations and chairman of the Development Economic Committee of the Verein für Socialpolitik. His research focuses on development economics, globalization and political economy.
The title for his presentations is "The Political Economy of Chinese Aid", and an abstract is given below. The talk is based on a book project, and two related papers below.
Please sign up for individual meetings with Axel here (note that the dinner will be late on Monday night and Axel will have to leave very shortly after the seminar): https://doodle.com/poll/ws36p6f6cdhiuwky