The Economist

The Economist — Aid brought Liberia back from the brink

In "Aid brought Liberia back from the brink," The Economist discusses a vexing question in development economics: “Might aid actually make it harder to govern a poor country, even when (indeed, especially when) that country is a democracy?” Interviewed for the article, AidData's Executive Director Brad Parks draws from AidData research to note that “some of the most successful World Bank projects in Liberia have relied on high-level policymaking."

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Abstract

Abstract

Chinese “aid” is a lightning rod for criticism. Policy-makers, journalists, and public intellectuals claim that Beijing uses its largesse to cement alliances with political leaders, secure access to natural resources, and create exclusive commercial opportunities for Chinese firms—all at the expense of citizens living in developing countries. We argue that much of the controversy about Chinese “aid” stems from a failure to distinguish between China's Official Development Assistance (ODA) and more commercially oriented sources and types of state financing. Using a new database on China's official financing commitments to Africa from 2000 to 2013, we find that the allocation of Chinese ODA is driven primarily by foreign policy considerations, while economic interests better explain the distribution of less concessional flows. These results highlight the need for better measures of an increasingly diverse set of non-Western financial activities.

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