Nourishing Minds: Assessing the Subnational Impacts of Chinese Foreign Aid on Youth Education in Africa

• In Event: Academic achievements and the role of foreign aid

Proposal

As the region with the world’s youngest population, Africa is poised to become the global labor market in the foreseeable future. However, the continent needs to position itself to reap the demographic dividends its enormous, young, and rapidly growing population stands to provide by pursuing appropriate programs to improve education attainment and skills. Reaching this goal requires mobilizing different funding sources and technical assistance, thus heralding the discourse about the function of foreign aid in supporting education systems in Africa. As Kamkwamba (2021) aptly noted, despite differences in what works, international educators, policymakers, and development organizations agree that the next frontier in eliminating global poverty starts with education in Africa and that development finance is partly the solution. This paper offers an empirical subnational analysis of Chinese development finance, investigating whether and how its foreign aid projects, including education technology-related projects, influence African youths’ secondary and post-secondary education attainment.
The foundations of development aid emerged in the 1940s and early 1950s with the works of eminent scholars like Roy Harrod, Evsey Domar, Paul Rosenstein-Rodan, and Ragnar Nurske (Staicu & Barbulescu, 2015). This period accompanied political changes in the former colonies in Africa, Latin America, and Asia, and aid was conceived as a growth engine for the newly independent countries, similar to the Marshall Plan in Europe (Kostrzewa et al., 1989). Its evolution has also been marked by successive waves of growth and contraction since the mid-twentieth century. Data from the Organization for Economic Cooperation and Development (OECD) shows that total official development assistance (ODA) disbursements to Africa between 1960 and 2022 stood at US$2.06 trillion. Over the years, the large scale of aid allocation coupled with national governments’ expenditure and response to global demand for resources have fast-tracked two decades of economic growth in Africa, with the International Labour Organization (ILO) (2020) reporting that the continent recorded a 3.2% growth rate in 2019, up from 2.1% in 2016. Also, Africa has remarkably advanced education. Nonetheless, per capita incomes and employment elasticity have remained low, accompanied by slow growth in productivity (ILO, 2020), relatively meagre rates of living standard (Westcott, 2022), and education attainment.
Existing studies on aid effectiveness show mixed findings. Also, the literature reveals little about the impact of Chinese foreign aid on education. Besides, the subnational and disaggregated aid literature is only recently growing, and no consensus exists regarding foreign aid projects’ grassroots-level impacts. This paper therefore undertakes a subnational analysis of the effects of Chinese foreign aid projects on secondary and tertiary education enrollment and completion among youths in Africa. It seeks to answer the research questions: To what extent does Chinese aid influence African youth’s educational attainment? Through what pathways do Chinese aid effects on Africa’s youth education materialize?
We adopt two conceptual models to guide the study. Firstly, the positive income model supposes that the financial and employment opportunities accompanying inward aid can raise regional and household income levels, enabling individuals to pursue schooling to develop skills and secure the certifications they need to thrive in the labor market (see, e.g., Haer & Østby, 2023; Jackson et al., 2015). Secondly, physical intervention effects underscore the capacity of development aid to directly affect education by fast-tracking a region’s process of urbanization, reducing physical barriers and improving education quality. Empirically testing these models is crucial to influencing education development capital allocations.
Our analysis harmonizes 76 Demographic and Health Survey datasets from 25 countries with data on 585 Chinese aid projects in Africa between 2000 and 2014 sourced from AidData, relying on their geospatial and temporal information and clustering the units at the second administrative (ADM2) level. We adopt a spatial difference-in-difference (DiD) estimation strategy. This approach compares education attainment rates among units vis-à-vis proximity to project sites (within a 50km cut-off distance) under implementation/completion with the impacts of living close to locations where a project is planned but not executed in the DHS year.
Our findings indicate that proximity to active Chinese aid projects significantly enhances secondary and tertiary enrollment and completion rates among youths in Africa, with results robust across multiple validity checks. Moreover, examining two mechanisms to explain the pathways of aid effects, we find that Chinese aid significantly improves African youth education primarily through increased economic activity, rather than through the degree of urbanization. Also, Chinese education sector aid has the most substantial impact on youth educational outcomes in Africa compared to other sectors. Within this, tertiary-level and non-infrastructure aid projects (scholarships, grants, and training) exhibit the strongest impacts, addressing monetary and human capital barriers to schooling. We argued that these results are logical owing to trends in Chinese aid allocation for human resource development in Africa, experience sharing, the appeal of Chinese development finance, and spillover effects of aid in different sectors.
Additionally, before China's development financial engagements in Africa expanded, the continent hosted various donor projects spurring growth and human capital development. Several studies argue that China’s ascent on the global stage and involvement in development finance will likely fast-track donor competition and crowding-out effects (see Zeitz, 2020). Hence, we compare the impacts of Chinese aid projects with other donors by analyzing the effects of aid projects from the World Bank (2000-2014), India (2007-2014), and the African Development Bank (AfDB) (2009-2010). We also included projects from the top 15 DAC donors to Burundi, DRC, Malawi, Nigeria, Senegal, Sierra Leone, and Uganda since 2000, drawing on each country’s Development Assistance Database provided by AidData. Our results of non-Chinese aid revealed that the World Bank marginally improves youth secondary and post-secondary education in Africa and AfDB only significantly improves tertiary education attainment. Moreover, the World Bank and the Aid Information Management System (AIMS) compete with and crowd out Chinese aid effects on education. Lastly, a test excluding areas with active projects from all donors in our analysis, reveals that Chinese aid projects positively influence African youth educational attainment.

Author

• Dickson David Agbaji, Graduate School of Education, Peking University