The 2022 Financing for Sustainable Development Report identifies a “great finance divide” as a main driver of the divergent recovery. Developed countries were able to borrow record sums at ultra-low interest rates to support their people and economies, but the pandemic response and investment in... recovery of poor countries was limited by fiscal constraints. This joint report, by over 60 agencies of the United Nations system and partner international organizations, provides analysis and puts forward policy recommendations to overcome this “finance divide” and enhance developing countries’ access to financing for recovery and productive and sustainable investment.
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We combine data on Chinese development projects with data from Demographic and Health Surveys to study the impact of Chinese aid on household welfare in sub-Saharan Africa. We use a novel methodology to test the effect of Chinese aid on three important development outcomes: education, health, and nu...trition. For each outcome, we use difference-in-difference estimations to compare household areas near Chinese project sites to control areas located farther away, before and after receiving Chinese aid. This empirical strategy rules out many confounding factors that can bias measuring the impact of Chinese aid on our outcome variables. First, we find that Chinese projects significantly improve education and child mortality in treatment areas, but do not significantly affect nutrition. Second, social sector projects have a larger effect on outcomes than economic projects. Third, we do not find significant effects for projects that ended more than five years before the post-treatment survey wave. Our results are robust to a host of robustness checks.
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