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Post-disaster aid and development of the manufacturing sector: Lessons from a natural experiment in China revisited

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  • Akhundjanov, Sherzod B.

Abstract

Bulte et al. (2018), examining the effects of the 2008 earthquake in China, report quasi-experimental evidence of Dutch Disease dynamics in the context of post-disaster aid and recovery. The authors’ conclusion from the synthetic control analysis relies exclusively on visual inspection of the post-earthquake gap between the treated unit and its synthetic control, without implementing the method’s formal inferential procedures. Our reanalysis shows that, while the gap may appear visually large and persistent over time, it is not statistically significant. Within the synthetic control framework, we find no evidence supporting aid-induced Dutch Disease dynamics. This weakens the original study’s conclusion by showing that the reported effect is not robust to alternative methods.

Suggested Citation

  • Akhundjanov, Sherzod B., 2026. "Post-disaster aid and development of the manufacturing sector: Lessons from a natural experiment in China revisited," Economics Letters, Elsevier, vol. 267(C).
    • Handle: RePEc:eee:ecolet:v:267:y:2026:i:c:s0165176526002685
    DOI: 10.1016/j.econlet.2026.113074
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    Keywords

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    JEL classification:

    • F35 - International Economics - - International Finance - - - Foreign Aid
    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology

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