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Undermining conditionality? The effect of Chinese development assistance on compliance with World Bank project agreements

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  • Mitchell Watkins

    (SOAS University of London)

Abstract

Does Chinese development assistance undermine recipient country compliance with DAC aid conditionality? I theorize that Chinese aid provides an outside option that weakens recipient countries’ incentives to comply with conditionality by decreasing their dependence on DAC donors and undermining the ability of DAC donors to credibly commit to the enforcement of aid agreements. I test the theoretical predictions using project-level data on government compliance with World Bank project agreements for a sample of 42 Sub-Saharan African countries from 2000-2014. The empirical analysis finds strong support for the hypothesis that Chinese development assistance decreases the likelihood of recipient country compliance with the conditions specified in World Bank project agreements. The results are robust to alternative measures of Chinese development assistance, potential sources of omitted variable bias, and an instrumental variable estimation strategy.

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  • Mitchell Watkins, 2022. "Undermining conditionality? The effect of Chinese development assistance on compliance with World Bank project agreements," The Review of International Organizations, Springer, vol. 17(4), pages 667-690, October.
    • Handle: RePEc:spr:revint:v:17:y:2022:i:4:d:10.1007_s11558-021-09443-z
    DOI: 10.1007/s11558-021-09443-z
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    Cited by:

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    More about this item

    Keywords

    China; Conditionality; Foreign aid; World Bank;
    All these keywords.

    JEL classification:

    • F35 - International Economics - - International Finance - - - Foreign Aid
    • F53 - International Economics - - International Relations, National Security, and International Political Economy - - - International Agreements and Observance; International Organizations
    • O19 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - International Linkages to Development; Role of International Organizations
    • F50 - International Economics - - International Relations, National Security, and International Political Economy - - - General
    • O55 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Africa

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