Assessing the Impact of China's Aid on the World Bank Conditionality

This study aims to investigate whether the stringency of conditions attached to the World Bank aid projects are influenced by the additional supply of aid from China. The World Bank’s conditionality has been disaggregated into prior actions and benchmarks. Prior actions are the legal conditions that determine aid disbursement, while benchmarks describe the contents and progress of an aid project. We find that, in particular, China is challenging the way the World Bank is providing aid to African countries, and its impact appears evident from the World Bank’s response; it has reduced the number of prior actions. However, providing an alternate source to China’s aid for other regions seems rather difficult, as no statistically significant association between China’s aid and prior actions can be found.