China and the World Bank—How contrasting development approaches affect the stability of African states

Chinese aid and health at the country and local level

“…42 For approaches that mirror ours in instrumenting World Bank aid, see Gehring et al (2019) and Jensen et al (2019). See Figure A.2 in the Appendix for a graphical depiction of (potentially spurious) trends.…”

“…In contrast, China gives substantial leeway to recipient countries on where to spend its aid (Dreher et al 2018(Dreher et al , 2019a. These two donors are thus very different in terms of how they exercise control over the recipients' use of aid, allowing us to compare the effects of aid for a donor that is particularly lenient to one that is particularly stringent among the set of all official donors of aid (Gehring et al 2019). 9 We combine the data on aid with health indicators from 92 demographic and health surveys in a maximum of 53 countries over the 2002-2014 period.…”

“…Even if aid affects outcomes in the regions it is given to, the effects might be insufficiently substantial to be measurable at the country-level. This observation has led recent studies to focus on sub-national regions, investigating the effects of aid on development at the province or district level, or even finer sub-national scales (Dreher and Lohmann 2015, Bitzer and Goeren 2018, Isaksson and Kotsadam 2018, Gehring et al 2019, Maseland and Minasyan 2019. However, subnational regressions can be misleading if aid displaces other funds across space which is likely within but not across countries.…”

“…which geocoded data are equally available. This allows comparing two donors that the literature considers to affect development very differently-one perceived as being rather selfish and thus potentially harmful for recipient-country development, the other being a multilateral organization with much-appraised standards for allocating its aid (e.g., Gehring et al 2019). We expect China's non-interference and "on-demand" policy to make its aid particularly fungible: To the extent that China responds to recipients' requests for aid without any policies in place that would ensure the aid is additional, recipient governments can easily use it to finance projects it would have funded anyway.…”

“…Countries with established aid relationships are then expected to receive a larger chunk of this aid, all else equal. SinceDreher et al (2019b) have first introduced this instrument in 2016, a number of follow-up studies have used it, includingBrazys and Vadlamannati (2018),Gehring et al (2019),Humphrey andMichaelowa (2019), andZeitz (2020). The instrument was further refined in Bluhm…”