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Chinese Aid and Health at the Country and Local Level

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Listed:
  • John Cruzatti C.
  • Axel Dreher
  • Johannes Matzat

Abstract

We investigate whether and to what extent Chinese development finance affects infant mortality, combining 92 demographic and health surveys (DHS) for a maximum of 53 countries and almost 55,000 sub-national locations over the 2002-2014 period. We address causality by instrumenting aid with a set of interacted variables. Variation over time results from indicators that measure the availability of funding in a given year. Cross-sectional variation results from a sub-national region’s “probability to receive aid.” Controlled for this probability in tandem with fixed effects for country-years and provinces, the interactions of these variables form powerful and excludable instruments. Our results show that Chinese aid increases infant mortality at sub-national scales, but decreases mortality at the country-level. In several tests, we show that this stark contrast likely results from aid being fungible within recipient countries.

Suggested Citation

  • John Cruzatti C. & Axel Dreher & Johannes Matzat, 2020. "Chinese Aid and Health at the Country and Local Level," CESifo Working Paper Series 8352, CESifo.
  • Handle: RePEc:ces:ceswps:_8352
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    health aid; fungibility; infant mortality;
    All these keywords.

    JEL classification:

    • I15 - Health, Education, and Welfare - - Health - - - Health and Economic Development
    • F35 - International Economics - - International Finance - - - Foreign Aid

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