An empirical investigation into the motivations for and consequences of China's aid to developing countries

Student thesis: Doctoral Thesis

Abstract

This thesis consists of three distinct, yet interrelated, chapters titled 'Assessing the Impact of China's Aid on the World Bank Conditionality', 'A Study on the Role of Human Rights in the Aid Allocations of China and the United States.', and 'The Impact of China's Aid on the Trading Behaviour of Developing Countries'.The first chapter investigates 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.The second chapter considers whether there is substance to claims that, relative to the US, China disregards human rights considerations when allocating aid. Bivariate analysis demonstrates that a significant share of China's aid flows to countries that have a poor human rights record. At the same time, the policy of the US in providing aid to those countries seems little different. The empirical results also provided some support for the general pessimism regarding China's provision of aid to countries with poor human rights records yet challenge the optimists who expect better targeted aid from the US.The impact of China's aid on the trading behaviour of developing countries is evaluated in the third chapter. The wider implications of China's aid on developing countries' exports and imports from the rest of the world are analysed, and there is also focus on the bilateral effects of China's aid by evaluating recipients' exports and imports from China.The key results indicate that China's aid is effective in promoting the overall exports and imports of developing countries from the rest of the world. As far as the bilateral effects of China's aid on recipients' exports and imports from China are concerned, no strong evidence is found that aid recipients significantly increase their exports and imports from China as a result of receiving aid.
Date of Award20 Oct 2020
Original languageEnglish
Awarding Institution
  • University Of Strathclyde
SponsorsUniversity of Strathclyde
SupervisorIan Wooton (Supervisor) & Julia Darby (Supervisor)

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