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Who Pursues Prestige Projects, And Why? Evidence From Chinese Development Finance - C&WP Fellow Austin Strange
Abstract: What explains China’s persistent financing of high-profile “prestige projects” in developing countries? More generally, why do governments sometimes pursue grandiose but non-essential development projects in societies with urgent basic development needs? I argue that governments of least developed countries often have strong domestic political incentives to seek and associate themselves with externally-financed prestige projects, and that donor governments provide these projects to states willing to support donors’ diplomatic interests. After identifying a set of Chinese government-financed prestige projects using a new dataset, I show that these projects are concentrated in the world’s poorest and smallest countries. I also find that China’s government overwhelmingly supplies prestige projects to states that increase their support for Chinese diplomatic objectives. Accompanying tests do not find similar relationships for China’s concessional foreign aid or commercially-oriented development projects. A final set of tests examines the public opinion consequences of prestige projects. Overall, the findings illuminate a thus far underappreciated political logic for prestige projects, and also offer an initial step in understanding the public opinion effects of different types of Chinese development projects.

Dec 7, 2020 04:30 PM in Eastern Time (US and Canada)

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