IDEAS home Printed from https://ideas.repec.org/a/sae/jocore/v61y2017i5p935-963.html
   My bibliography  Save this article

Tracking Underreported Financial Flows: China’s Development Finance and the Aid–Conflict Nexus Revisited

Author

Listed:
  • Austin M. Strange
  • Axel Dreher
  • Andreas Fuchs
  • Bradley Parks
  • Michael J. Tierney

Abstract

China’s provision of development finance to other countries is sizable but reliable information is scarce. We introduce a new open-source methodology for collecting project-level development finance information and create a database of Chinese official finance (OF) to Africa from 2000 to 2011. We find that China’s commitments amounted to approximately US$73 billion, of which US$15 billion are comparable to Official Development Assistance following Organization for Economic Cooperation and Development definitions. We provide details on 1,511 projects to fifty African countries. We use this database to extend previous research on aid and conflict, which suffers from omitted-variable bias due to the exclusion of Chinese development finance. Our results show that sudden withdrawals of “traditional†aid no longer induce conflict in the presence of sufficient alternative funding from China. Our findings highlight the importance of gathering more complete data on the development activities of “nontraditional donors†to better understand the link between aid and conflict.

Suggested Citation

  • Austin M. Strange & Axel Dreher & Andreas Fuchs & Bradley Parks & Michael J. Tierney, 2017. "Tracking Underreported Financial Flows: China’s Development Finance and the Aid–Conflict Nexus Revisited," Journal of Conflict Resolution, Peace Science Society (International), vol. 61(5), pages 935-963, May.
    • Handle: RePEc:sae:jocore:v:61:y:2017:i:5:p:935-963
    DOI: 10.1177/0022002715604363
    as

    Download full text from publisher

    File URL: https://journals.sagepub.com/doi/10.1177/0022002715604363
    Download Restriction: no
    File URL: https://libkey.io/10.1177/0022002715604363?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Fuchs, Andreas & Dreher, Axel & Hodler, Roland & Parks, Bradley C. & Raschky, Paul, 2015. "Aid on Demand: African Leaders and the Geography of China s Foreign Assistance," VfS Annual Conference 2015 (Muenster): Economic Development - Theory and Policy 112838, Verein für Socialpolitik / German Economic Association.
    2. Robert Lensink & Oliver Morrissey, 2000. "Aid instability as a measure of uncertainty and the positive impact of aid on growth," Journal of Development Studies, Taylor & Francis Journals, vol. 36(3), pages 31-49.
    3. Dreher, Axel & Nunnenkamp, Peter & Thiele, Rainer, 2011. "Are ‘New’ Donors Different? Comparing the Allocation of Bilateral Aid Between nonDAC and DAC Donor Countries," World Development, Elsevier, vol. 39(11), pages 1950-1968.
    4. de Ree, Joppe & Nillesen, Eleonora, 2009. "Aiding violence or peace? The impact of foreign aid on the risk of civil conflict in sub-Saharan Africa," Journal of Development Economics, Elsevier, vol. 88(2), pages 301-313, March.
    5. Vijaya Ramachandran, Julie Walz, 2011. "Brave New World: A Literature Review of Emerging Donors and the Changing Nature of Foreign Assistanc- Working Paper 273," Working Papers 273, Center for Global Development.
    6. Burcu Savun & Daniel C. Tirone, 2011. "Foreign Aid, Democratization, and Civil Conflict: How Does Democracy Aid Affect Civil Conflict?," American Journal of Political Science, John Wiley & Sons, vol. 55(2), pages 233-246, April.
    7. Dreher, Axel & Fuchs, Andreas & Hodler, Roland & Parks, Bradley C. & Raschky, Paul A. & Tierney, Michael J., 2019. "African leaders and the geography of China's foreign assistance," Journal of Development Economics, Elsevier, vol. 140(C), pages 44-71.
    8. Findley, Michael G. & Powell, Josh & Strandow, Daniel & Tanner, Jeff, 2011. "The Localized Geography of Foreign Aid: A New Dataset and Application to Violent Armed Conflict," World Development, Elsevier, vol. 39(11), pages 1995-2009.
    9. Benjamin Crost & Joseph Felter & Patrick Johnston, 2014. "Aid under Fire: Development Projects and Civil Conflict," American Economic Review, American Economic Association, vol. 104(6), pages 1833-1856, June.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Richard Bluhm & Martin Gassebner & Sarah Langlotz & Paul Schaudt, 2021. "Fueling conflict? (De)escalation and bilateral aid," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 36(2), pages 244-261, March.
    2. Dreher, Axel & Fuchs, Andreas & Langlotz, Sarah, 2019. "The effects of foreign aid on refugee flows," European Economic Review, Elsevier, vol. 112(C), pages 127-147.
    3. Stijn van Weezel, 2017. "Mostly Harmless? A Subnational Analysis of the Aid-Conflict Nexus," Working Papers 201728, School of Economics, University College Dublin.
    4. Aurore Gary & Mathilde Maurel, 2015. "Donors’ Policy Consistency and Economic Growth," Kyklos, Wiley Blackwell, vol. 68(4), pages 511-551, November.
    5. Jing Shao & Maojun Wang, 2020. "Analyzing the spatial allocation of Japan’s aid to China: A perspective from the relations between aid allocation stakeholders," Growth and Change, Wiley Blackwell, vol. 51(3), pages 1277-1303, September.
    6. Isaksson, Ann-Sofie & Kotsadam, Andreas, 2018. "Racing to the bottom? Chinese development projects and trade union involvement in Africa," World Development, Elsevier, vol. 106(C), pages 284-298.
    7. Paul Bezerra & Alex Braithwaite, 2016. "Locating foreign aid commitments in response to political violence," Public Choice, Springer, vol. 169(3), pages 333-355, December.
    8. repec:elg:eechap:15325_15 is not listed on IDEAS
    9. Isaksson, Ann-Sofie & Kotsadam, Andreas, 2018. "Chinese aid and local corruption," Journal of Public Economics, Elsevier, vol. 159(C), pages 146-159.
    10. Eugen Dimant & Tim Krieger & Daniel Meierrieks, 2024. "Paying Them to Hate US: The Effect of US Military Aid on Anti-American Terrorism, 1968–2018," The Economic Journal, Royal Economic Society, vol. 134(663), pages 2772-2802.
    11. Isaksson, Ann-Sofie, 2020. "Chinese Aid and Local Ethnic Identification," International Organization, Cambridge University Press, vol. 74(4), pages 833-852, October.
    12. Anaxagorou, Christiana & Efthyvoulou, Georgios & Sarantides, Vassilis, 2020. "Electoral motives and the subnational allocation of foreign aid in sub-Saharan Africa," European Economic Review, Elsevier, vol. 127(C).
    13. Eichenauer, Vera Z. & Fuchs, Andreas & Kunze, Sven & Strobl, Eric, 2020. "Distortions in aid allocation of United Nations flash appeals: Evidence from the 2015 Nepal earthquake," World Development, Elsevier, vol. 136(C).
    14. Stijn van Weezel, 2017. "The Effect of Civil War Violence on Aid Allocations in Uganda," Working Papers 201725, School of Economics, University College Dublin.
    15. Martorano, Bruno & Metzger, Laura & Sanfilippo, Marco, 2020. "Chinese development assistance and household welfare in Sub-Saharan Africa," World Development, Elsevier, vol. 129(C).
    16. Hagen, Rune Jansen, 2014. "Rents and the Political Economy of Development Aid," Working Papers in Economics 07/14, University of Bergen, Department of Economics.
    17. Dreher, Axel & Fuchs, Andreas & Hodler, Roland & Parks, Bradley C. & Raschky, Paul A. & Tierney, Michael J., 2019. "African leaders and the geography of China's foreign assistance," Journal of Development Economics, Elsevier, vol. 140(C), pages 44-71.
    18. Zürcher, Christoph, 2017. "What Do We (Not) Know About Development Aid and Violence? A Systematic Review," World Development, Elsevier, vol. 98(C), pages 506-522.
    19. Michael E. Flynn, 2020. "Before the dominos fall: Regional conflict, donor interests, and US foreign aid," Conflict Management and Peace Science, Peace Science Society (International), vol. 37(1), pages 39-57, January.
    20. Jessica Maves Braithwaite & Amanda Abigail Licht, 2020. "The Effect of Civil Society Organizations and Democratization Aid on Civil War Onset," Journal of Conflict Resolution, Peace Science Society (International), vol. 64(6), pages 1095-1120, July.
    21. Samuel Brazys & Krishna Chaitanya Vadlamannati, 2021. "Aid curse with Chinese characteristics? Chinese development flows and economic reforms," Public Choice, Springer, vol. 188(3), pages 407-430, September.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:sae:jocore:v:61:y:2017:i:5:p:935-963. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: SAGE Publications (email available below). General contact details of provider: http://pss.la.psu.edu/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.