- Research paper
The authors investigate whether the political leaders of aid-receiving countries use foreign aid inflows to further their own political or personal interests. Aid allocation biased by leaders’ selfish interests arguably reduces the effectiveness of aid, negatively affecting development outcomes. The authors examine whether more Chinese aid is allocated to the political leaders’ birth regions and regions populated by the ethnic group to which the leader belongs, controlling for objective indicators of need. The authors have collected data on 117 African leaders’ birthplaces and ethnic groups and geocoded 1,955 Chinese development finance projects across 3,553 physical locations in Africa over the 2000-2012 period. The results from various fixed-effects regressions show that current political leaders’ birth regions receive substantially larger financial flows than other regions. The authors do not find evidence that leaders shift aid to regions populated by groups who share their ethnicity. Published by AidData, Working Paper 3. Follow-up blog post by the authors, 'What Aid on Demand Says and Doesn't Say about China in Africa': aiddata.org/blog/diving-into-the-details-what-aid-on-demand-says-and-doesnt-say-about-china-in-africa.