After the breakdown of protest at Tiananmen in 1989, China discovered development aid as a tool to overcome international isolation. Due to China’s economic growth and its inclusion into international markets through the WTO entry in 2001, aid amounts soared and China has since then become a significant donor, with estimations regarding it as the sixth biggest donor country in the world.
In contrast to development aid of the OECD donor nations, China sets no conditions for the granting of development assistance, with the exception of the diplomatic recognition of Taiwan as a part of China (‘One-China Policy’). As a promoter of the international norm of non-intervention, authorities in Beijing do not demand structural reform of governance in the recipient’s country for the supply of aid. The question of this paper is on the one hand, if Chinese aid by providing alternatives for developing countries removes the incentive of democratization accompanying traditional aid by OECD donors and on the other hand, as unconditional non-tax revenue, similar to the existence of natural resources in a country, endows ruling governments with a means to maintain their power and hence impairs fair party competition?
To answer this question, I measure the effect of Chinese aid on development country’s democracies by relying on statistical panel data analysis. Including theories of international relations, the paper adds to the understanding of autocratic cooperation and authoritarian norm promotion and by relying on democratization theories, to the understanding of regime type transformations.
