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Chinese Aid and Health at the Country and Local Level

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  • Cruzatti C., John
  • Dreher, Axel
  • Matzat, Johannes

Abstract

We investigate whether and to what extent Chinese development finance affects infant mortality, combining 92 demographic and health surveys (DHS) for a maximum of 53 countries and almost 55,000 sub-national locations over the 2002-2014 period. We address causality by instrumenting aid with a set of interacted variables. Variation over time results from indicators that measure the availability of funding in a given year. Cross-sectional variation results from a sub-national region's "probability to receive aid." Controlled for this probability in tandem with fixed effects for country-years and provinces, the interactions of these variables form powerful and excludable instruments. Our results show that Chinese aid increases infant mortality at sub-national scales, but decreases mortality at the country-level. In several tests, we show that this stark contrast likely results from aid being fungible within recipient countries.

Suggested Citation

  • Cruzatti C., John & Dreher, Axel & Matzat, Johannes, 2020. "Chinese Aid and Health at the Country and Local Level," CEPR Discussion Papers 14862, C.E.P.R. Discussion Papers.
  • Handle: RePEc:cpr:ceprdp:14862
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    References listed on IDEAS

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    Cited by:

    1. Christopher Kilby, 2020. "Accounting for data uncertainty: Biases in web-scraped Chinese aid data," Villanova School of Business Department of Economics and Statistics Working Paper Series 45, Villanova School of Business Department of Economics and Statistics.

    More about this item

    Keywords

    Fungibility; Health Aid; infant mortality;

    JEL classification:

    • F35 - International Economics - - International Finance - - - Foreign Aid
    • I15 - Health, Education, and Welfare - - Health - - - Health and Economic Development

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