Research

Can Aid Buy Foreign Public Support?

Evidence from Chinese Development Finance 

with Axel Dreher, Andreas Fuchs, Bradley Parks, and  Austin Strange

Bilateral donors use foreign aid to gain soft power. We test the effectiveness of aid in reaching this goal by leveraging a new dataset on the precise commitment, implementation, and completion dates of Chinese development projects. We use data from the Gallup World Poll for 126 countries over the 2006-2017 period and identify causal effects with (i) an event-study model that includes high-dimensional fixed effects, and (ii) instrumental-variables regressions that rely on exogenous variation in the supply of Chinese government financing over time. Our results are nuanced and depend on whether we focus on subnational jurisdictions, countries, or groupings of countries. Overall, Beijing's aid program seems to enhance foreign public support for the Chinese government.

Working Paper: AidData. CEPR. CESifo. Kiel WP. 

Forthcoming in Economic Development and Cultural Change.

The Effect of Foreign Aid on Migration

with Andreas Fuchs, Tobias Heidland, and André Gröger

This article investigates how international development projects affect migration preferences among individuals living in the Global South vicinity of project sites. To do so, we combine timestamped individual-level survey data from the Gallup World Poll with georeferenced data on World Bank project locations in 140 countries over the 2008-2020 period. Our empirical approach exploits variation over time within regions and region-year spells to identify the causal effects of development projects on migration intentions. The results are twofold. In the short term, we observe a significant negative impact of project announcements on migration aspirations in aid-receiving countries after the project approval date. In the longer term, higher aid disbursements lead to reduced migration aspirations in recipient areas, while we do not find effects on migration plans and preparations.

Working Paper: Kiel WP

Media coverage: IfW Kiel. Sueddeutsche. Welt. Devex. 

Biased Bureaucrats and the Policies of International Organizations 

with Valentin Lang and Alexander Kentikelenis

Do international bureaucrats shape global governance? In this paper, we build on the view that international bureaucracies matter for global policy-making but call the homogeneity assumption into question. In particular, we argue that bureaucrats have diverging preferences and exert heterogeneous influence on policy output, thereby affecting IO decision-making. We test whether IMF mission chiefs are able to use their influence to design IMF conditionality according to their own preferences. Our identification strategy follows the judge fixed effect approach and exploits the repeated appointment of IMF mission chiefs to various countries. For each mission chief, we estimate her individual propensity to apply certain conditions using a “jackknife” approach based on previous and future appointments. Our results suggest that IMF staff exert substantial impact on IMF policies. Preferences of mission chiefs not only explain differences in the stringency of conditions but also relate to differences in the policy focus of conditionality in areas like labour market regulation and social policy.

Revise & resubmit at AJPS. Draft available upon request.

The Economic Consequences of the War:

Germany after World War I 

with Tobias Korn and Matthias Quinckhardt

We investigate the role of World War I casualties on German economic and political development in the interwar period. We geocoded the birthplaces of 8.5 million wounded and killed German soldiers, and linked these casualties to newly digitized county-level census data from before and after the war. Our main results are based on continuous difference-in-differences estimations and illustrate that counties that suffered a higher human loss during the war specialized more in industrial production and moved employment out of self-sufficient farming. Counter-intuitively, we find that wages in the low-skilled sector decreased in more affected counties, which we interpret as a negative skill selection effect. 

PEDD Young Scholar Award 2023. RGS Econ Best Paper Award 2023.