The Effects of Chinese Aid and Investment on State Building in Africa
Posted: 26 Mar 2014 Last revised: 4 Sep 2014
Date Written: 2014
What is the impact of Chinese aid and investment on the capacity and perceived legitimacy of recipient states in sub-Saharan Africa? In recent years China has dramatically expanded its presence across the continent, provoking acrimonious debate among scholars and policymakers about the efficacy of the assistance it provides. Unlike many Western donors, China typically builds the sorts of large-scale infrastructure projects that are essential for boosting state capacity, but rarely imposes good governance conditions on recipient states. China has also been implicated in predatory or exclusionary hiring practices in the countries where it operates. We hypothesize that this combination of characteristics produces a capacity/legitimacy trade-off: even as Chinese assistance increases the capacity of recipient states, it simultaneously decreases their legitimacy in the eyes of citizens. We propose to test this hypothesis through a two-pronged research design: a cross-national analysis covering all countries in sub-Saharan Africa, and a sub-national analysis focusing on Liberia, Tanzania and the Democratic Republic of Congo. For the cross-national component, we propose to measure the size, location and completion date of all Chinese investment and development projects from 2000 to the present, building on data collected by the AidData initiative. We will combine this information with a variety of publicly available datasets to measure state capacity and legitimacy, including the Worldwide Governance Indicators, the World Values Survey, and Afrobarometer, among other sources. We are exploring several possible identification strategies to isolate the causal effect of Chinese aid and investment on these outcomes for example, by using changes in recipient countries diplomatic ties with Taiwan as an instrument for changes in the size and scope of Chinese assistance. For the sub-national component, we propose to combine administrative records on state capacity with surveys to measure citizens attitudinal responses to state authority and lab-in-the-field experiments (based on the tax compliance game) to measure their behavioral responses as well.
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