The Growth Effects of Chinese Development Assistance in Sub-Saharan Africa: An Empirical Analysis

Abstract

In this paper, I focus on the effectiveness of Chinese developmental aid in Sub-Saharan Africa and further explore under what conditions can Chinese developmental aid work effectively. The finding suggests that Chinese ODA fuels economic growth. Chinese development aid works effectively in countries with anocratic regimes. With concerns of losing authority, leaders in anocratic regimes can have a strong incentive to seek economic gains from foreign aid. Moreover, we find that the growth impact of Chinese aid depends on the US aid presence. In countries where no US aid presence, Chinese development aid works effectively in boosting economic growth. This finding shed light on the competition between China and the US for regional influence via developmental aid.