Business & Economics
Under Xi Jinping, China has expanded its aid allocation worldwide and has introduced global infrastructure projects to connect itself to countries everywhere. With such ambitious aid allocation, China has been the recipient of both admiration and scorn on the international stage. This paper assesses these concerns using data from 2000 to 2017 to determine how Chinese aid affects recipient states’ economic and political institutions. Specifically, this research looked to ascertain if there is a measurable Xi Effect in recipient states. The quantitative analysis shows the Xi Effect is small and positive on economic institutions and political institutions, signifying Xi Jinping’s tenure is not having adverse effects on institutions in recipient states. However, these questions remain vital because it is well noted that institutions matter for economic development, especially as the world looks to China for development aid and Xi Jinping consolidates his power in China. Lastly, the implications of the findings for U.S. foreign policy in Latin America are considered. Based on quantitative analysis and a qualitative case study, it is recommended that the US promotes bilateral and multilateral ties with its Southern neighbors rather than using China’s increasing involvement as a justification for reviving the antiquated Monroe Doctrine.
Owens, Mackenzie, "Estimating the Xi Effect: How Chinese Aid Affects Economic and Political Institutions" (2023). Business and Economics Honors Papers. 54.
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