Decentralized Economic Statecraft

Speaker: Alicia Chen, PhD Candidate in Political Science, Stanford University

Economic statecraft requires countries to trade off security and economic gains. This study provides a framework to explain how China manages this dilemma by considering the allocation of Chinese foreign aid. The study documents how, unlike Western donors, Chinese aid is allocated by local politicians rather than central policymakers in Beijing, and that these politicians are subject to a competitive promotion system centered around generating economic growth and fiscal revenue. Under this incentive scheme, local politicians use foreign aid to meet economic targets at home for career advancement. The theory is tested using provincial- and contractor-level aid data and a regression discontinuity design that exploits age restrictions in China’s promotion system. The results show that promotion-eligible politicians commit nearly $20 million more in aid annually compared to their ineligible counterparts.

About the Workshops

Our Young Researcher Workshops offer emerging China scholars an opportunity to engage directly with interdisciplinary faculty and peers from across campus to discuss and receive feedback on their research. Each workshop features one or several PhD students presenting their latest empirical findings on issues related to China’s economy. Past topics have included college major selection as an obstacle to socioeconomic mobility, the effect of a cooling-off period on marriage outcomes, and factors contributing to government corruption. Faculty and senior scholars provide comments and feedback for improvement. This event series helps to build and strengthen Stanford’s community of young researchers working on China.

Workshops are held on select Fridays. Lunch will be provided! 

Visit the Young Researcher Workshops webpage for more information on the content and format of the series and to learn how to sign up to present. 

Questions? Contact Ragina Johnson at raginaj@stanford.edu