Rogue agent or team player? Beijing’s motivations for aid provision

A new study in ISQ pinpoints the factors that motivate Beijing to provide aid and other forms of government financing to Africa.

February 6, 2018

Axel Dreher, Andreas Fuchs, Brad Parks, Austin M. Strange, and Michael J. Tierney

Over the last fifteen years, a sharp increase in Chinese "aid" to Africa has provoked speculation and controversy about Beijing’s motivations. Western journalists, public intellectuals, and think tank researchers have popularized the idea that Beijing favors corrupt and authoritarian regimes and is motivated by a desire to purchase the loyalty of Africa’s governing elites, secure access to the continent's rich natural resources, and create commercial opportunities and advantages for Chinese firms. This "rogue donor" narrative has quickly gained currency among Western policymakers.

However, existing public discussion about Chinese development finance rests on fragile evidentiary foundations. One important reason is that China’s government discloses few details about its overseas development activities. Another reason is that researchers have developed idiosyncratic measurement standards for defining and counting Chinese "aid" that make it hard to make apples-to-apples comparisons with Western development finance. A lack of transparency in the data and the methods that researchers use to arrive at their conclusions has also created confusion rather than clarity.

In a new article in International Studies Quarterly (ISQ), entitled "Apples and Dragon Fruits: The Determinants of Aid and Other Forms of State Financing from China to Africa," we analyze a first-of-its-kind dataset that identifies the known universe of Chinese Government-financed projects in Africa from 2000 to 2013. We use this dataset to test several of the most popular and persistent claims about the underlying motivations that guide China’s growing overseas development program. 

Contrary to the conventional wisdom, we find no evidence that China privileges authoritarian or corrupt regimes in its allocation of Official Development Assistance (ODA). Nor do we find evidence that commercial self-interest and natural resource acquisition are motivational drivers. We instead find that Beijing weighs heavily some of the very same humanitarian and developmental criteria that Western donors consider when making ODA allocation decisions. Poor and populous countries, for example, receive a disproportionate amount of Chinese ODA. Governments that support China’s foreign policy positions in the U.N. General Assembly also receive more Chinese ODA. Here too China’s aid-giving motivations bear a striking resemblance to those of Western donors.

Our study also demonstrates why it is crucial to separately measure and analyze Chinese official development assistance (ODA) and other forms of financing from the Chinese Government that lack developmental intent or a sufficiently high grant element to qualify as ODA. We find that the latter type of funding flows disproportionately to more corrupt and resource-abundant countries, which helps explain why the "rogue donor" narrative about China has such staying power among Western pundits and policymakers. In fact, it is not Chinese ODA that flows to corrupt and natural resource-rich countries, but rather commercially-oriented forms of Chinese state financing with higher interest rates and lower grant elements, which is not aid in the traditional sense.

By entering this new source of evidence into the public record, we hope to not only build a stronger foundation for a cumulative social science research program on the drivers and effects of Chinese development finance, but also stimulate a more productive public discussion around this topic. The replication dataset and computer code for our ISQ article can be found here.

At a 2016 meeting of BRICS leaders, from left: President of Brazil Michel Temer, Prime Minister of India Narendra Modi, President of the People's Republic of China Xi Jinping, President of Russia Vladimir Putin, and President of the Republic of South Africa Jacob Zuma. Photo by RIA Novosti.

Axel Dreher is Professor of International and Development Politics at Heidelberg University. He is editor of the Review of International Organizations and chairman of the Research Group on Development Economics of the German Economic Association. Andreas Fuchs is a Senior Researcher at Heidelberg University’s Research Center for Distributional Conflict and Globalization. He leads the project “The Economics of Emerging Donors in Development Cooperation” funded by the German Research Foundation. You can follow him on Twitter @fuchs_andreas. Brad Parks is Executive Director of AidData at the College of William & Mary. He leads a team of 30 program evaluators, policy analysts, and media and communication professionals who are responsible for equipping policymakers and practitioners with better evidence to improve how sustainable development investments are targeted, monitored, and evaluated. You can follow their work on Twitter @AidDataAustin M. Strange is a Ph.D. Candidate in Harvard University’s Department of Government. You can follow him on Twitter @austinmstrangeMichael Tierney is George C. and Mary C. Hylton Professor of Government and International Relations at the College of William & Mary. He co-founded AidData and currently directs the Institute for the Theory and Practice of International Relations.