Is Chinese Aid Different?

New Paper by Prof. Anke Hoeffler and Dr. Olivier Sterck

Title: Is Chinese Aid Different?

Link to Paper

Research Question: Does China prioritise self-interest more strongly in its allocation of ODA compared to other major donors?

Background: China is often described as a “rogue” donor, prioritising Chinese interests over the needs of the recipient country.

Research Objectives:

  • ­Compare China’s aid allocation behaviour to that of the five largest donor countries globally: France, Germany, Japan, the UK, and the USA.
  • Measure the importance of different factors in predicting aid allocation to African countries.

Results:

  • Donors’ aid allocation strategies exhibit significant differences.
  • Germany, Japan, the US, and the UK assign high importance to recipients' needs.
  • France and China's allocation models are for a large part driven by variables that relate to self-interest: trade relationships in the case of France, and the adherence to the “One-China policy” in the case of China.
  • Language is also an important factor for France and the UK, which tend to favour their former colonies, and for China and the US, which favour English-speaking countries.
  • Recipients’ merit (e.g., democracy) does not explain Chinese aid allocation and is of only secondary importance for the five OECD DAC donors.

Main Conclusion:

  • The claim that China's aid allocation is different must be qualified. The Chinese aid model is different, not because of self-interest in terms of access to natural resources and gaining global influence, but because it penalises countries recognising Taiwan.

Methodology Info

Axel Dreher, Andreas Fuchs, Brad Parks, Austin M. Strange and Michael J. Tierney have previously developed an allocation model of Chinese aid. We use their model as a starting point but (1) allow for a direct comparison with other donors and (2) quantify the importance of different predictors of aid. We find that: a.) the Dreher et al. (2018) model developed for Chinese aid provides a better explanation for aid from other donors; b.) the recognition of Taiwan is the most important explanatory factor of Chinese aid, it alone explains 13 per cent of Chinese aid allocation, about as much as all other explanatory variables in sum.

Dreher, A., A. Fuchs, B. Parks, A. M. Strange, and M. J. Tierney (2018). Apples and dragon fruits: The determinants of aid and other forms of state financing from China to Africa. International Studies Quarterly 62(1), 182-194.