Do Chinese Aid Projects in Africa Make Corruption Worse? And If So, Why?

Development aid is a potentially powerful tool for promoting economic growth among the world’s poor. However, development aid is plagued by corruption, in no small part because many of the poorest areas are also the most susceptible to corruption. In addition to that dilemma, some research suggests that the injection of outside funds into existing corrupt societies can actually exacerbate governance problems. Is this true? And does the impact of development aid on corruption (and development) depend on the source of the aid? An important new paper by Ann-Sofie Isaksson and Andreas Kotsadam suggests that the answers are yes and yes—in particular, they find that Chinese aid projects in Africa may worsen local corruption.

To investigate the question whether Chinese aid projects affect local corruption in Africa, the authors combine data from separate sources. For data on local corruption, the authors make use of the Afrobarometer surveys, with data on nearly 100,000 respondents in 29 countries, collected over a 12 year period (2000-2012) in four separate surveys. The authors focus in particular on respondents’ answer to questions about the frequency of paying bribes to avoid problems with the police or to obtain documents or permits. The authors use the geographic location of survey respondents, together with information on the geographic location of 227 Chinese-aid-supported projects in Africa, in order to identify those respondents who live geographically close to a project supported by Chinese development aid. The results are stark: African citizens who live in areas with Chinese-sponsored projects are 4 percentage points more likely to pay a bribe to police, and 2 percentage points more likely to pay a bribe for permits or documents. Given baseline reported bribery rates of about 13-14%, this means that citizens living near a Chinese aid project are about 30% more likely to report paying a bribe to the police, and about 15% more likely to report paying a bribe for a permit or document.

The most natural explanation is that Chinese aid projects tend to stimulate more corruption. There are, of course, a number of other possible explanations, which the authors address and for the most part rule out, or at least suggest are unlikely:

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Using the Unmatched Count Technique (UCT) to Elicit More Accurate Answers on Corruption Experience Surveys

With apologies to those readers who couldn’t care less about methodological issues associated with corruption experience surveys, I’m going to continue the train of thought I began in my last two posts (here and here) with further musings on that theme—in particular what survey researchers refer to as the “social desirability bias” problem (the reluctance of survey respondents to truthfully answer questions about sensitive behaviors like corruption). Last week’s post emphasized the seriousness of this concern and voiced some skepticism about whether one of the most common techniques for addressing it (so-called “indirect questioning,” in which respondents are asked not about their own behavior but about the behavior of people “like them” or “in their line of business”) actually works as well as is commonly assumed.

We professors, especially those of us who like to write blog posts, often get a bad rap for criticizing everything in sight but never offering any constructive solutions. The point is well-taken, and while I can’t promise to lay off the criticism, in today’s post I want to try to be at least a little bit constructive by calling attention to a promising alternative approach to mitigating the social desirability bias problem in corruption experience surveys: the unmatched count technique (UCT), sometimes alternatively called the “item count” or “list” method. This approach has been deployed occasionally by a few academic researchers working on corruption, but it hasn’t seemed to have been picked up by the major organizations that field large-scale corruption experience surveys, such as Transparency International’s Global Corruption Barometer (GCB), the World Bank’s Enterprise Surveys (WBES), or the various regional surveys (like AmericasBarometer or Afrobarometer). So it seemed worthwhile to try to draw more attention to the UCT. It’s by no means a perfect solution, and I’ll say a little bit more about costs and drawbacks near the end of the post. But the UCT is nonetheless worth serious consideration, both by other researchers designing their own surveys for individual research projects, and by more established organizations that regularly field surveys on corruption experience.

The way a UCT question works is roughly as follows: Continue reading