Chinese Aid and Local Employment in Africa

Guo, Shiqi; An, Jiafu; Jiang, Haicheng

doi:10.2139/ssrn.3718578

Cited by 12 publications

(15 citation statements)

References 38 publications

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“…Nevertheless, studies that analyse the localized effects of Chinese aid projects provide convincing evidence that Chinese aid projects have significant impacts on the welfare of locals living close to project sites, though characterized by some nuances. These findings outline that Chinese aid improves infant mortality and education (Martorano et al, 2020); as well as local employment (Guo & Jiang, 2020). These findings, therefore, suggest that Chinese aid projects improve citizenry livelihood, particularly those living close to project sites.…”

Section: Literature Reviewmentioning

confidence: 83%

The impact of Chinese aid on political trust

Atitianti

2022

J of Intl Development

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This paper examines whether Chinese aid impacts citizens' trust in government by matching geocoded data on Chinese aid projects located in sub-Sahara Africa (SSA) between 2000 and 2014 to respondents from rounds 3 to 6 of Afrobarometer survey. Implementing an instrumental variable (IV) estimation to control for the potential endogeneity of aid, this paper finds robust evidence that Chinese aid reduces trust in government. The decline in trust seems to be because the aid projects stimulate poor assessments of government performance and perceptions that government officials are involved in corrupt activities. Replication analysis reveals that World Bank projects are no different and also reduce trust in government. Consequently, these findings reignite concerns about the unintended consequences of aid and the need to adopt implementation approaches that mitigate unintended adverse outcomes.

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Section: Literature Reviewmentioning

confidence: 83%

The impact of Chinese aid on political trust

Atitianti

2022

J of Intl Development

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“…Chinese aid projects have been found to positively impact the employment opportunities of their immediate residents, both directly and indirectly, albeit within a short-term period of the projects' construction (Guo & Jiang, 2020).…”

Section: Exploring Potential Mechanismsmentioning

confidence: 99%

“…China's aid projects in Africa have been shown to boost local economic activity, particularly in surrounding areas, and create jobs in the short term (Bai et al, 2022; Guo & Jiang, 2020). Since the immediate residents of these projects are beneficiaries of the positive impact on employment, this positive externality encourages the provision of criminal activities in these areas.…”

Section: Introductionmentioning

confidence: 99%

“…First, we provide evidence of the impact of infrastructure investment on neighbourhood criminal activities. A strand of the literature studied how increased infrastructure investments reduce local criminal activities by creating direct or indirect job opportunities (Guo & Jiang, 2020; Montolio, 2018). These studies are based on Becker's (1968) model, which states that the opportunity cost of crime increases with better employment opportunities.…”

Section: Introductionmentioning

confidence: 99%

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Chinese aid and crime: Evidence from Africa

Appiah-Kubi

Jarrett

2023

J of Intl Development

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We study how the allocation of resources impacts localised crime rates. Recent studies on the effects of Chinese aid in Africa have increased rapidly, and this paper contributes by showing the mechanism by which aid increases crime. Using a geo‐referenced dataset of subnational allocation of Chinese projects, geographically matched with 145 701 respondents of four rounds of Afrobarometer surveys from 36 African countries, we use a difference‐in‐difference‐in‐difference (DDD) approach and an instrumental variable (IV) identification strategy to account for endogeneity and capture the effect of living near projects under implementation before or after a survey against those with no projects. We find that Chinese aid projects significantly increased crime rates in the immediate locations where the projects were implemented. The main channel of effect is the increased local economic activities leading to the availability of employable opportunities. There is a similar but smaller magnitude of the effect regarding projects funded by other donor agencies.

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“…First, previous research shows that Chinese development projects lead to short-run economic growth through the creation of jobs and the spreading of economic activity , Guo and Jiang 2021. Higher incomes in recipientcountry populations lead to higher standards of living which may result in more satisfied citizens.…”

Section: Testing Mechanismsmentioning

confidence: 99%