Poverty Reduction Effect of Chinese Foreign Aid to Africa: An Empirical Study Based on Panel Data of 48 Recipient Countries

Abstract

This research examines the impact and mechanisms of poverty alleviation associated with Chinese aid to African countries, utilizing comprehensive panel data from the 2000-2017 timeframe. A detailed exploration of salient indicators - the headcount ratio, poverty gap, and poverty severity - has been conducted to critically evaluate the efficacy of this aid. The study substantiates that Chinese aid meaningfully ameliorates the headcount ratio, lessens the poverty gap, and mitigates poverty severity in the recipient countries. Further examination of mechanisms reveals that the principal stratagem of reducing poverty resides in the proliferation of capital accumulation, fostering job generation, and advancing human capital development in the recipient countries. An assessment of varied outcomes demonstrates Chinese aid to be most potent in poverty alleviation in countries characterized by diminished per capita income and lower corruption indices. When compared, Official Development Assistance (ODA) exerts a more pronounced impact on curtailing poverty severity than other official aids, which have a more potent influence on reducing poverty incidence. Mixed aid-types demonstrate superior efficacy in decreasing poverty incidence, with development aid showing remarkable proficiency in addressing poverty depth and severity. This investigation significantly broadens the existing discourse on the poverty-reduction impact of Chinese foreign aid, offering invaluable insights and articulate points of reference for the enhancement of collaborative strategies in poverty alleviation policy between nations.