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Chinese development assistance and household welfare in sub-Saharan Africa

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  • Bruno Martorano
  • Laura Metzger
  • Marco Sanfilippo

Abstract

We combine data on Chinese development projects with data from Demographic and Health Surveys to study the impact of Chinese aid on household welfare in sub-Saharan Africa. We use a novel methodology to test the effect of Chinese aid on three important development outcomes: education, health, and nutrition. For each outcome, we use difference-in-difference estimations to compare household areas near Chinese project sites to control areas located farther away, before and after receiving Chinese aid. This empirical strategy rules out many confounding factors that can bias measuring the impact of Chinese aid on our outcome variables. First, we find that Chinese projects significantly improve education and child mortality in treatment areas, but do not significantly affect nutrition. Second, social sector projects have a larger effect on outcomes than economic projects. Third, we do not find significant effects for projects that ended more than five years before the post-treatment survey wave. Our results are robust to a host of robustness checks.

Suggested Citation

  • Bruno Martorano & Laura Metzger & Marco Sanfilippo, 2019. "Chinese development assistance and household welfare in sub-Saharan Africa," RSCAS Working Papers 2019/09, European University Institute.
  • Handle: RePEc:rsc:rsceui:2019/09
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    Cited by:

    1. Bluhm, Richard & Dreher, Axel & Fuchs, Andreas & Parks, Brad & Strange, Austin & Tierney, Michael J., 2020. "Connective Financing - Chinese Infrastructure Projects and the Diffusion of Economic Activity in Developing Countries," CEPR Discussion Papers 14818, C.E.P.R. Discussion Papers.
    2. Iacoella, Francesco & Martorano, Bruno & Metzger, Laura & Sanfilippo, Marco, 2021. "Chinese official finance and political participation in Africa," European Economic Review, Elsevier, vol. 136(C).
    3. Krishna Chaitanya Vadlamannati & Yuanxin Li & Samuel Brazys & Alexander Dukalskis, 2019. "Building Bridges or Breaking Bonds? The Belt and Road Initiative and Foreign Aid Competition," Working Papers 201906, Geary Institute, University College Dublin.
    4. Dreher, Axel & Fuchs, Andreas & Hodler, Roland & Parks, Bradley C. & Raschky, Paul A. & Tierney, Michael J., 2021. "Is Favoritism a Threat to Chinese Aid Effectiveness? A Subnational Analysis of Chinese Development Projects," World Development, Elsevier, vol. 139(C).
    5. Xu, Zhicheng Phil & Zhang, Yu, 2020. "Can Chinese aid win the hearts and minds of Africa’s local population?," Economic Modelling, Elsevier, vol. 90(C), pages 322-330.
    6. Dreher, Axel & Fuchs, Andreas & Hodler, Roland & Parks, Bradley C. & Raschky, Paul A. & Tierney, Michael J., 2019. "African leaders and the geography of China's foreign assistance," Journal of Development Economics, Elsevier, vol. 140(C), pages 44-71.

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    More about this item

    Keywords

    aid effectiveness; Chinese aid; household welfare; DHS; geocoded data;
    All these keywords.

    JEL classification:

    • F35 - International Economics - - International Finance - - - Foreign Aid
    • O19 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - International Linkages to Development; Role of International Organizations
    • R20 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - General

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