In this recent article, published on October 7th, 2016 in The Washington Post‘s Monkey Cage blog, my co-authors Bradley Parks, Roland Hodler, Axel Dreher, Michael Tierney, Andreas Fuchs, and I discuss the findings of our study“Aid on Demand: African Leaders and the Geography of China’s Foreign Assistance”.
This study employs a novel dataset compiled by AidData that contains geocoded data on 1,650 Chinese development finance projects across 3,097 physical locations in Africa over the period 2000–2012.
Chinese aid improves development outcomes in Africa, it is also vulnerable to political capture. We show that Africa’s politically privileged may benefit disproportionately from Chinese development projects, with fewer benefits going to politically marginalized regions. In particular, we find that more aid projects and funds end up in the current political leader’s birth region and the capital of the recipient country.
One example is described on Daron Acemoglu’s and James Robinson’s blog Why Nations Fail.
It is the case of Yoni, a small town in Sierra Leone in the middle of what Africans call “the bush”.
A new school was built there, fully financed by Chinese Development Aid
In addition, everyone received a new house.
Maybe one reason that Yoni has received this new school and houses is that it is the birth place Sierra Leone’s president, Ernest Bai Koroma.
Our study shows that the case of Yoni is not an isolated incident and that Chinese aid systematically benefits regions of political importance.
In general, our results raise questions about the long-run consequences of persistent or widening inequality, which a number of researchers point out may heighten the risks of social unrest, violent conflict and political instability in Africa.