Winning Hearts and Minds or Stoking Resentment?
Exploring the Effects of Chinese Foreign Aid on Africans’ Perceptions of China

2018 NCCU Institute for International Relations Conference

Evan Jones
University of Maryland

03 December, 2018

Geopolitics of China’s Foreign Aid

  • Between 2000-12, Africa received 52 billion (2014 USD deflated) in aid (Bluhm et al. 2018)
  • 2017 US National Security White Paper: Economically counter “China’s often extractive economic footprint on the continent [Africa]”
  • 2018 Forum on China-Africa Cooperation: Xi Jinping pledges another $60 billion in aid to African countries
  • 2018 US BUILD Act: doubles Overseas Private Investment Corporation budget and legalizes equity stakes

Is Aid All Geopolitics?

Aid as an instrument of geopolitics (Morgenthau 1962; Alesina and Dollar 2000; Dreher and Fuchs 2015)

But it has important soft power implications

Tangible impacts of Chinese Aid:

  • Improved economic development (Dreher et al. 2017)
  • local corruption (Isaksson and Kotzadam 2016)
  • environmental degradation (BenYishay et al. 2016)
  • Improved household welfare (Martorano et al. 2018)
  • Reduced economic inequality (Bluhm et al. 2018)

Research Questions

  1. What is the effect of foreign aid on individuals’ attitudes toward donor countries, in particular China?
  2. More generally, does aid and investment win hearts and minds or stoke resentments?
  3. What are the mechanisms through which aid influences individual’s opinions?
  4. Do ODA-like and OOF aid have differential effects?

Theory

Data

DV “Now let’s talk about the role that China plays in our country. In general, do you think that China’s economic and political influence on [ENTER COUNTRY] is mostly positive, or mostly negative, or haven’t you heard enough to say”? (Q81b)

- Use Geocoded Afrobarometer Round 6 Survey (BenYishay et al. 2017)

Data

IV Pair 37,896 respondents to projects within 25 km bandwidth
  Receive one of three treatments: ODA, OOF, Vague

- AidData’s Geocoded Global Chinese Official Finance v1.1.1 (Bluhm et al. 2018)

Geographic Distribution of Chinese Aid and Investment

Diameter denotes relative monetary values

Controls and Weighting Technique

Probability of receiving different treatment types not random Reweight data set to induce balance on control variables Chosen method: Gradient Boosting (GBM) estimated propensity score

Comparing Weighting Techniques

GBM vs Logit: Bias-Variance Trade-off
Logit Est. Logit SE GBM Est. GBM SE
ODA 0.0310 2.6056 0.0284 0.0134
OOF -0.3606 2.6083 -0.3143 0.0136
Vague -0.0967 2.5773 -0.0921 0.0133
urbrur 0.1748 1.8480 0.1500 0.0096
age -0.0016 0.0693 -0.0007 0.0004
female -0.0262 1.8362 -0.0340 0.0096
home_region 0.3986 2.4150 0.4314 0.0126

Results

Conclusions and Moving Forward

  • Only OOF matters; stokes negative resentments of China

  • ODA does not generate goodwill, even among beneficiaries

Exposure Mechanism:

  • strategy to account for aid project heterogeneity?

  • bipartite network model weighted by distance to project?

Filter Mechanism:

  • need way to directly measure changes in domestic debates

  • identify if debates divided by political cleavages

Bibliography

1. Alesina, Alberto and David Dollar. 2000. “Who Gives Foreign Aid to Whom and Why?” Journal of Economic Growth 5(1): 33-63.

2. BenYishay, Ariel, Bradley Parks, Daniel Runfola, and Rachel Trichler. 2016. “Forest Cover Impacts of Chinese Development Projects in Ecologically Sensitive Areas.” AidData Working Paper #32. Williamsburg, VA: AidData. Accessed at http://aiddata.org/working-papers.

3. BenYishay, Ariel, Rotberg, R. Wells, J., Lv Z., Goodman, S., Kovacevic, L., Runfola, D. 2017. “Geocoding Afrobarometer Rounds 1-6: Methodology & Data Quality. AidData: Available online at http://geo.aiddata.org.

4. Bluhm, Richard, Axel Dreher, Andreas Fuchs, Bradley Parks, Austin Strange, and Michael Tierney. 2018. “Connective Financing: Chinese Infrastructure Projects and the Diffusion of Economic Activity in Developing Countries.” AidData Working Paper #64. Williamsburg, VA: AidData. Accessed at https://www.aiddata.org/publications/connective-finance-chinese-infrastructure-projects.

5. Dreher, Axel and Andreas Fuchs. 2015. “Rogue Aid? An Empirical Analysis of China’s Aid Allocation.” Canadian Journal of Economics 48: 988-1023.

6. Dreher, Axel, Andreas Fuchs, Bradley Parks, Austin M. Strange, and Michael J. Tierney. 2017. “Aid, China, and Growth: Evidence from a New Global Development Finance Dataset.” AidData Working Paper #46. Williamsburg, VA: AidData. Accessed at http://aiddata.org/working-papers.

7. Isaksson, Ann Sofie, and Andreas Kotsadam. 2018. “Chinese Aid and Local Corruption.” Journal of Public Economics 159: 146-159.

Morgenthau, Hans. 1962. “A Political Theory of Foreign Aid.” American Political Science Review 56(2): 301-9.