It is a commonly accepted idea in IR theory that states have the habit of externalizing their domestic institutions [and accompanying economic and political systems] in their engagements within the international system (See Katzenstein, 1976 [pdf, gated]) – think democracy promotion, Reagan-Thatcherist free market evangelism, or Sino-Russian coziness with states that have an authoritarian bend.
This phenomenon has non-trivial implications for development assistance. For instance, poor countries receiving capacity development assistance from say a Scandinavian liberal democracy often need to also adopt related practices beyond the narrow specific field (say tax reform) that is being addressed by the capacity development program. Many projects fail to produce the desired results because of this. Indeed past research has shown that “though aid [from wealthier, mostly Western democracies] does not affect quality of life in the aggregate, it is effective when combined with democracy, and ineffective (and possibly harmful) in autocracies.” [Kosack, 2003- pdf]
So does the effect of Chinese aid/finance to poorer countries follow this pattern? In other words, does the institutional incongruence effect also hold for autocratic donors?
The folks at Aid Data blog think it does:
…… we estimate the relationship between Chinese development finance and human development in democratic and autocratic recipient countries. Our results show a negative relationship between Chinese development finance and human development in democratic countries. Interestingly, these results also suggest that Chinese development finance can successfully promote HDI growth for autocratic recipients. Kosack found the opposite pattern in his study of Western aid.
The findings are preliminary and may not withstand robustness checks, but all the same interesting.
More on this here.
Also, check out the Economist for a neat analysis of the potential impact of a Chinese economic slowdown on African economies.