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Development Aid

“Izandla ziyagezana” - “Hands Wash Each Other”

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The intended beneficiaries of Chinese-funded projects sometimes complain about

quality-control issues as Beijing rushes to help countries install the "hardware" of
economic development (e.g., highways, railroads, dams, bridges, ports and electricity

grids). There are news reports from time to time about empty hospitals, roads that have
washed away and white elephant projects.

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But many African leaders insist that China is a more reliable and efficient partner.

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Finally, using a statistical approach that makes it possible to estimate the causal impact

of Chinese development projects, we find that a 10 percent increase in Chinese
development finance corresponds to an 0.6-1.1 percent increase in per capita nighttime

light output -- and a 0.2-0.3 percent rise in regional GDP. China is quite literally lighting up
Africa.

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Governing elites in developing countries seem to be manipulating these projects for their

own political gain. We find that a disproportionate share of Chinese development projects
show up in politically privileged areas -- specifically the birth regions of African leaders

(and their spouses).
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And the level of political targeting bias is high. Our results indicate that the average
African leader's birth region receives roughly three times as much (195 percent more)

financial support from China during the leader's time in power. By contrast, we find no
evidence for this type of political targeting bias in the spatial distribution of World Bank-

funded projects.
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When taken together, our findings suggest that China may be inadvertently cementing or
widening spatial inequalities within African countries. Yes, Chinese development projects
improve local development outcomes in Africa, but not necessarily in the areas that need

them most (since leaders' birth regions tend to be among the richest localities within
African countries).”

"Chinese Aid Is Helping African Economies, but Not in the Places That Need It Most." 464
Parks, Bradley, Roland Hodler, Axel Dreher, Paul Raschky,
Michael J. Tierney, and Andreas Fuchs.
Washington Post. (October 2016)
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