Aid and Conflict at the Sub-National Level: Evidence from World Bank and Chinese Development Projects in Africa

Does aid fuel conflict in recipient countries? Existing studies of aggregate country level data or specific aid types in individual countries do not conclusively answer this question. We use georeferenced data on development projects by the World Bank (WB) and China, two donors with strongly contrasting approaches to development, to provide a comprehensive analysis of the effect of aid on conflict at the sub-national level in Africa. The results using fixed effects and instrumental variables strategies indicate that aid from both donors, on average, reduces rather than fuels lethal conflict. Our analysis suggests that this is driven by projects in the transport and financial sector, and relates to less lethal government violence against civilians. There is also no increased likelihood of demonstrations, strikes, or riots, but more government repression in regions with Chinese aid. Analysis of Afrobarometer survey data is consistent with this and highlights differences between the two donors.

‍