Development Finance and Distributive Politics: Comparing Chinese and World Bank Finance in sub-Saharan Africa

Academic literature has dedicated limited attention to the
subnational allocation of development finance. The limited
literature has highlighted the role of donor interests and
regime type in foreign finance allocation. In this paper, I
examine both factors using geocoded data on China and the
World Bank’s grant and loan flow to 48 African countries from
2000 to 2012. In contrast to most of the existing empirical
research, I found that the more democratic a regime is, the
more likely co-ethnic regions of the incumbent leader are to
receive development finance. I then focus on case studies of
elections in a hybrid regime, Zambia, and an autocratic
regime, Ethiopia. The core argument is that domestic politics
play a bigger role than donors’ conditionality in the
subnational distribution of development finance. The
widespread competitive clientelism in many African countries
puts more political survival pressure on democratic leaders to
target their co-ethnic regions, while autocratic leaders only
need to secure the support of a small circle of elites. This
research has broader implications for understanding how
political competition feeds clientelism in weak institutions.