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Tracking Under-Reported Financial Flows: China’s Development Finance and the Aid-Conflict Nexus Revisited

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  • Strange, Austin M.
  • Parks , Bradley
  • Tierney, Michael J.
  • Fuchs, Andreas
  • Dreher , Axel

Abstract

China’s development finance is sizable but reliable information is scarce. To address critical information gaps, we introduce a new open source methodology for collecting project-level development finance information and create a database of Chinese official finance to Africa from 2000-2011. Our initial data collection efforts found that China’s official finance commitments amount to approximately US$ 73 billion over the 2000-2011 period. We provide details on 1,511 non-investment projects to 50 African countries. We use this database to extend previous research on the aid-conflict nexus. Our results show that sudden withdrawals of “traditional” aid are only more likely to induce conflict in the absence of sufficient alternative funding from China. More broadly, these findings highlight the importance of gathering better data on the development activities of China and other non-traditional donors to better understand the link between foreign aid and conflict.

Suggested Citation

  • Strange, Austin M. & Parks , Bradley & Tierney, Michael J. & Fuchs, Andreas & Dreher , Axel, 2014. "Tracking Under-Reported Financial Flows: China’s Development Finance and the Aid-Conflict Nexus Revisited," Working Papers 0553, University of Heidelberg, Department of Economics.
    • Handle: RePEc:awi:wpaper:0553
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    1. de Ree, Joppe & Nillesen, Eleonora, 2009. "Aiding violence or peace? The impact of foreign aid on the risk of civil conflict in sub-Saharan Africa," Journal of Development Economics, Elsevier, vol. 88(2), pages 301-313, March.
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    Cited by:

    1. Zhiming Cheng & Russell Smyth, 2016. "Why Give it Away When You Need it Yourself? Understanding Public Support for Foreign Aid in China," Journal of Development Studies, Taylor & Francis Journals, vol. 52(1), pages 53-71, January.
    2. Richard Bluhm & Martin Gassebner & Sarah Langlotz & Paul Schaudt, 2021. "Fueling conflict? (De)escalation and bilateral aid," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 36(2), pages 244-261, March.
    3. Martorano, Bruno & Metzger, Laura & Sanfilippo, Marco, 2020. "Chinese development assistance and household welfare in Sub-Saharan Africa," World Development, Elsevier, vol. 129(C).
    4. Kitano, Naohiro & Harada, Yukinori, 2014. "Estimating China’s Foreign Aid 2001-2013," Working Papers 78, JICA Research Institute.
    5. Daniele Pianeselli, 2016. "Does The one who pays the piper really call the tune? OECD and Chinese aid to infrastructure in Sub-Saharan Africa," Departmental Working Papers of Economics - University 'Roma Tre' 0204, Department of Economics - University Roma Tre.

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    JEL classification:

    • F35 - International Economics - - International Finance - - - Foreign Aid
    • F51 - International Economics - - International Relations, National Security, and International Political Economy - - - International Conflicts; Negotiations; Sanctions
    • D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances; Revolutions

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