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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.

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  • 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. repec:spr:revint:v:12:y:2017:i:2:d:10.1007_s11558-017-9275-2 is not listed on IDEAS
    2. Bluhm, Richard & Gassebner, Martin & Langlotz, Sarah & Schaudt, Paul, 2016. "Fueling conflict? : (De)escalation and bilateral aid," MERIT Working Papers 053, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    3. repec:spr:revint:v:12:y:2017:i:2:d:10.1007_s11558-017-9272-5 is not listed on IDEAS
    4. Broich, Tobias, 2017. "Do authoritarian regimes receive more Chinese development finance than democratic ones? Empirical evidence for Africa," MERIT Working Papers 011, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    5. Isaksson, Ann-Sofie & Kotsadam, Andreas, 2018. "Racing to the bottom? Chinese development projects and trade union involvement in Africa," World Development, Elsevier, vol. 106(C), pages 284-298.
    6. Isaksson, Ann-Sofie & Kotsadam, Andreas, 2018. "Chinese aid and local corruption," Journal of Public Economics, Elsevier, vol. 159(C), pages 146-159.
    7. 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.
    8. Danny Cassimon & Dennis Essers & Karel Verbeke, 2016. "The changing face of Rwanda's public debt," BeFinD Working Papers 0114, University of Namur, Department of Economics.
    9. repec:spr:revint:v:12:y:2017:i:2:d:10.1007_s11558-017-9273-4 is not listed on IDEAS
    10. Paul Bezerra & Alex Braithwaite, 2016. "Locating foreign aid commitments in response to political violence," Public Choice, Springer, vol. 169(3), pages 333-355, December.
    11. repec:taf:jdevst:v:52:y:2016:i:1:p:53-71 is not listed on IDEAS
    12. Hernandez, Diego, 2015. "Are “New” Donors Challenging World Bank Conditionality?," Working Papers 0601, University of Heidelberg, Department of Economics.
    13. 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.

    More about this item

    Keywords

    Development Finance; Foreign Aid; Non-DAC Donors; South-South Cooperation; China; Aid Shocks; Violent Armed Conflict.;

    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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