Chinese development assistance and household welfare in Sub-Saharan Africa

We study the impact of Chinese aid on household welfare in Sub-Saharan Africa by combining data on Chinese development projects with data from Demographic and Health Surveys. Using difference-in-differences estimations and a matching technique, we analyze the effect of Chinese aid on three social development outcomes: education, and child health and nutrition. We find that Chinese aid projects improve education and child mortality in treatment areas but have no effects on child nutrition. A sectoral analysis further reveals that social sector projects successfully improve households’ health and education. Improvements in these outcomes may additionally be driven indirectly by a positive effect of Chinese aid on economic welfare in treatment areas. Regarding the distribution and scale of Chinese projects we find that our results hold for lower treatment intensity levels only, suggesting a non-linear effect of Chinese aid.