Scandinavian Working Papers in Economics

Working Paper Series,
Research Institute of Industrial Economics

No 1337: Chinese Aid to Africa: Distinguishing Features and Local Effects

Ann-Sofie Isaksson () and Andreas Kotsadam ()
Additional contact information
Ann-Sofie Isaksson: Research Institute of Industrial Economics (IFN), Postal: Research Institute of Industrial Economics, Box 55665, SE-102 15 Stockholm, Sweden
Andreas Kotsadam: Ragnar Frisch Centre for Economic Research, Postal: Oslo, Norway

Abstract: Drawing on our recent work on local effects of Chinese development projects in Africa, this review article highlights a number of distinguishing features of Chinese aid, and discusses how these may translate into local aid impacts that differ from those of other donors. Unlike aid from other major donors, Chinese aid projects were found to fuel local corruption, discourage trade union involvement, to not increase political incumbency support, and to make ethnic identities more salient in the local areas. As such, our findings highlight important donor heterogeneities as well as the need to consider not only to what extent aid achieves its explicit objectives, but also its potential unintended effects, or externalities.

Keywords: China; Africa; Foreign aid

JEL-codes: F35; O19; O55

11 pages, May 7, 2020

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