Does Foreign Aid Raise Awareness of Corruption? Evidence from Chinese Aid in 30 African States

Does foreign aid raise awareness of political corruption among local recipients? Why and how do local aid projects increase individuals’ perceptions of corruption in recipient communities? Using a geocoded dataset of Chinese official finance flows along with Afrobarometer survey data, I explore the effects of Chinese aid on corruption perceptions among citizens in African states. The main results indicate that exposure to Chinese assistance increases the perceived level of corruption of government officials and political leaders, while World Bank aid does not. I also examine whether the types and targeted sectors of aid have differential impacts on individual perceptions of political corruption. The results indicate that grants have a more consistent impact on corruption perceptions than do other types of aid, suggesting that grants may provide rents more easily to politicians. Besides, developmental projects for social infrastructure raise respondents’ reports of dishonesty among public officials more than other sectors. It is because those projects substitute essential public services, thus lowering the accountability of local governments. Moreover, when Chinese agencies implement projects by themselves, the impact of Chinese aid on corruption perceptions increases substantially. The findings suggest that Chinese aid may increase the awareness of political corruption in local African communities, due primarily to suspicions regarding interactions between China and local people in African states.