Scandinavian Working Papers in Economics

Working Paper Series,
Research Institute of Industrial Economics

No 1336: Chinese Aid and Local Ethnic Identification

Ann-Sofie Isaksson ()
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Ann-Sofie Isaksson: Research Institute of Industrial Economics (IFN), Postal: Research Institute of Industrial Economics, Box 55665, SE-102 15 Stockholm, Sweden

Abstract: Recent empirical evidence suggests that Chinese development finance may be particularly prone to elite capture and patronage spending. If aid ends up in the pockets of political elites and their ethno-regional networks, this may exacerbate ethnic grievances and contribute to ethnic mobilization. The present paper examines whether Chinese development projects make local ethnic identities more salient in African partner countries. A new geo-referenced dataset on the subnational allocation of Chinese development finance projects to Africa is geographically matched with survey data for 50,520 respondents from 11 African countries. The identification strategy consists in comparing sites where a Chinese project was under implementation at the time of the interview to sites where a Chinese project will appear subsequently. The empirical results indeed suggest that living near an ongoing Chinese project makes ethnic identities more salient. There is no indication of an equivalent pattern when considering development projects of other donors.

Keywords: China; Aid; Ethnic identities; Africa

JEL-codes: F35; O19; O55

40 pages, May 6, 2020

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