Renminbi for Your Thoughts: How Chinese Aid Affects Local Perceptions of Corruption in Africa

Abstract

As China became a more prominent aid and investment partner to many African countries, observers began evaluating the effects of its activities on the continent. Some studies show that Chinese aid and investment projects benefit recipients’ economies. Others find Chinese aid and investment projects negatively affect governance, labor rights, environmental issues, and corruption. Recent studies on Chinese aid and corruption explore local effects of aid and investment. They suggest that local corruption levels increase in areas with Chinese aid projects. This thesis continues the investigation of Chinese aid and local corruption by examining the effects of Chinese aid on local perceptions of corruption over time and across various official positions, including police, local government councilors, and members of parliament. The data analysis applies regressions and difference-in-difference analyses to four survey rounds conducted in African countries in order to determine the effects of Chinese aid over time. The results indicate perceptions of local government councilor corruption are not linked more to Chinese aid than perceptions of members of parliament, meaning perceptions of corruption do not deviate on a simple spectrum of local to national officials. However, police corruption remained higher over time in areas with significant Chinese aid and investment flows than areas with little or no Chinese aid. This finding suggests there are lasting negative effects of Chinese aid and investment in local communities. Out of three reasons for perceptions of police corruption to increase, only hearsay and firsthand experience with corruption are feasible. The third possibility, that recipients have prior negative impressions with Chinese aid, is incompatible with recipients’ generally positive views of China. In light of these findings, local communities should be more cautious in considering the effects of Chinese aid and investment on corruption before engaging in partnerships with Chinese companies.