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Do authoritarian regimes receive more Chinese development finance than democratic ones? Empirical evidence for Africa

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  • Broich, Tobias

    (UNU-MERIT, and Maastricht University)

Abstract

This study is part of an emerging literature that aims to shed light on China's development finance activities in Africa using quantitative estimation techniques. This paper empirically investigates whether African authoritarian regimes receive more Chinese development assistance than democratic ones, both in absolute and relative terms. I use three different measures of democracy/autocracy which allows me to check whether my results depend on the specific indicator chosen. The OLS results suggest that Chinese development finance does not systematically flow to more authoritarian countries, controlling for strategic, economic, political, institutional and geographic confounding factors. The results are not driven by the specific democracy indicator used in the analysis. The findings remain virtually unchanged if I reduce the sample to Sub-Saharan Africa only. Furthermore, the results stand up to several robustness checks, including FE, RE and instrumental variable estimation.

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  • Broich, Tobias, 2017. "Do authoritarian regimes receive more Chinese development finance than democratic ones? Empirical evidence for Africa," MERIT Working Papers 2017-011, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    • Handle: RePEc:unm:unumer:2017011
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    3. Savin, Ivan & Marson, Marta & Sutormina, Marina, 2020. "How different aid flows affect different trade flows: Evidence from Africa and its largest donors," Structural Change and Economic Dynamics, Elsevier, vol. 55(C), pages 119-136.
    4. Marson, Marta & Savin, Ivan, 2022. "Complementary or adverse? Comparing development results of official funding from China and traditional donors in Africa," Structural Change and Economic Dynamics, Elsevier, vol. 62(C), pages 189-206.
    5. Loujaina Abdelwahed & Georgios Karras, 2021. "Did 272 billion dollars from China help stabilize business cycle fluctuations in recipient countries?," Review of International Economics, Wiley Blackwell, vol. 29(2), pages 314-358, May.
    6. Marlène Guillon & Jacky Mathonnat, 2019. "What can we learn on Chinese aid allocation motivations from available data ? A sectorial analysis of Chinese aid to African countries," Post-Print hal-02005784, HAL.
    7. Ben Cormier, 2023. "Chinese or western finance? Transparency, official credit flows, and the international political economy of development," The Review of International Organizations, Springer, vol. 18(2), pages 297-328, April.
    8. Cormier, Benjamin, 2023. "Chinese or western finance? Transparency, official credit flows, and the international political economy of development," LSE Research Online Documents on Economics 115294, London School of Economics and Political Science, LSE Library.
    9. Eunhye Yoo, 2021. "Chinese Development Finance and its determinants: Does global governance matter?," Development Policy Review, Overseas Development Institute, vol. 39(3), pages 471-492, May.
    10. Kassouri, Yacouba & Altıntaş, Halil & Bilgili, Faik, 2020. "An investigation of the financial resource curse hypothesis in oil-exporting countries: The threshold effect of democratic accountability," Journal of Multinational Financial Management, Elsevier, vol. 56(C).
    11. Sargis Karavardanyan, 2022. "Short-Term Harm, Long-Term Prosperity? Democracy, Corruption and Foreign Direct Investments in Sino-African Economic Relations," Comparative Economic Studies, Palgrave Macmillan;Association for Comparative Economic Studies, vol. 64(3), pages 417-486, September.
    12. Guillon, Marlène & Mathonnat, Jacky, 2020. "What can we learn on Chinese aid allocation motivations from available data? A sectorial analysis of Chinese aid to African countries," China Economic Review, Elsevier, vol. 60(C).

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    More about this item

    Keywords

    Development Finance; Foreign Aid; China; Africa; Autocracy; Democracy;
    All these keywords.

    JEL classification:

    • F35 - International Economics - - International Finance - - - Foreign Aid
    • H10 - Public Economics - - Structure and Scope of Government - - - General
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • O55 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Africa

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