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Birth Regions of African Political Leaders Profit Disproportionately From Chinese Development Aid

Press Release No. 240/2014
9 December 2014
International study with participation of Heidelberg researchers investigates local allocation of funds from 2,000 aid projects

Chinese development aid in Africa often flows disproportionately into the birth regions of African political leaders, even if the need is greater in other areas of the same country. This was the conclusion of a study conducted by an international team of researchers, including several Heidelberg economists. The study is based on development aid data that the researchers referenced to geographic regions. “Our data analysis suggests that leading politicians in the recipient countries allocate a percentage of Chinese funds based on personal interests, which can undermine the aid’s effectiveness,” reports Prof. Dr. Axel Dreher, one of the study’s co-authors, along with Dr. Andreas Fuchs of the Alfred Weber Institute for Economics of Heidelberg University. Dr. Fuchs presented the study, entitled “Aid on Demand: African Leaders and the Geography of China’s Foreign Assistance”, in Washington, D.C.

The team of researchers from the U.S., Switzerland, Australia and Germany investigated nearly 2,000 Chinese aid projects at more than 3,500 locations in Africa. They also gathered data on the birthplace and ethnicity of 117 African political leaders. The study showed that the birth regions of political leaders benefit disproportionately from development aid. According to Prof. Dreher, an average of 270 per cent more aid goes to these regions than to others. However, there was no evidence that regions populated by the same ethnic group the leaders belong to receive more aid. “Nor was there any proof of aid being allocated to areas with natural resources of interest to the Chinese, an assumption that is widely held,” adds Fuchs.

“China has a policy of non-interference in the domestic affairs of recipient countries,” explains Prof. Dreher. “This allows African politicians to allocate a substantial portion of aid from China to their constituencies.” The researchers remain unclear on just how effective this type of aid ultimately is. The extent to which aid to politically relevant regions brings long-term economic improvements to poorer regions and the country as a whole remains under dispute, in spite of numerous studies on the issue, as the researchers explain. Future studies should aim to paint a more accurate picture of the impact of aid allocation at the regional level on development goals such as economic growth and reducing poverty.

The current study was the first to consider the local allocation of aid across numerous countries over a longer period of time. In April 2013, the U.S. research consortium AidData, to which the scientists from Heidelberg are affiliated, published an online database that bundled information on Chinese development aid to Africa from 2000 to 2012. A new Web application now links this data to a map of the African continent that also incorporates other spatial information such as population, poverty and infrastructure. This allows the visual depiction of aid distribution at the local level. “Broken down in this way, the data can point to causes and effects at a level of detail that was never possible from overall data compiled only for the specific countries,” explains Prof. Dreher.

Original publication:
Dreher, Axel, Andreas Fuchs, Roland Hodler, Bradley C. Parks, Paul A. Raschky, Michael J. Tierney, Aid on Demand: African Leaders and the Geography of China’s Foreign Assistance, AidData Working Paper 3, 2014.

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Latest Revision: 2014-12-12
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