Does India Use Development Finance to Compete With China? A Subnational Analysis

Asmus-Bluhm, Ge da; Eichenaue , Ve a Z.; Fuchs, And eas; Pa ks, B adley
A icle — Published Ve sion
Does India Use De elopmen Finance o Compe e Wi h
China? A Subna ional Analysis
Jou nal o Con lic Resolu ion
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Kiel Ins i u e o he Wo ld Economy – Leibniz Cen e o Resea ch on Global Economic Challenges
Sugges ed Ci a ion: Asmus-Bluhm, Ge da; Eichenaue , Ve a Z.; Fuchs, And eas; Pa ks, B adley (2024) :
Does India Use De elopmen Finance o Compe e Wi h China? A Subna ional Analysis, Jou nal o
Con lic Resolu ion, ISSN 1552-8766, SAGE Publica ions, Thousand Oaks, Cali ., Vol. 69, Iss. 2-3, pp.
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A icle
Jou nal o Conflic Resolu ion
2025, Vol. 69(2-3) 406–433
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Does India Use De elopmen
Finance o Compe e Wi h
China? A Subna ional Analysis
Ge da Asmus-Bluhm
1,2
, Ve a Z. Eichenaue
3,4,5
,
And eas Fuchs
2,4
, and B adley Pa ks
6,7
Abs ac
China and India inc easingly p o ide aid and c edi o de eloping coun ies. This a icle
explo es whe he India uses hese financial ins umen s o compe e o geopoli ical and
comme cial influence wi h China. We build a new geocoded da ase o Indian
go e nmen -financed p ojec s in he Global Sou h be ween 2007 and 2014 and
combine i wi h da a on Chinese go e nmen -financed p ojec s. Ou eg ession esul s
o 2,333 p o inces wi hin 123 coun ies demons a e ha India’s Exim Bank is sig-
nifican ly mo e likely o loca e a p ojec in a gi en ju isdic ion i China p o ided
go e nmen financing he e in he p e ious yea . Since his e ec is mo e p onounced
in coun ies whe e India is mo e popula ela i e o China and whe e bo h lende s ha e
a simila expo s uc u e, we in e p e his as e idence o India compe ing wi h China.
By con as , we do no find e idence ha China uses o ficial aid o c edi o compe e
wi h India h ough co-loca ed p ojec s.
1
Depa men o Economics, Uni e si y o Hohenheim, Ge many
2
Depa men o Economics, Uni e si y o G¨
o ingen, Ge many
3
KOF Swiss Economic Ins i u e, ETH Zü ich, Swi ze land
4
Kiel Ins i u e China Ini ia i e, Kiel Ins i u e o he Wo ld Economy, Ge many
5
CESi o, Munich, Ge many
6
AidDa a, Global Resea ch Ins i u e, William & Ma y, Williamsbu g, VA, USA
7
Cen e o Global De elopmen , Washing on DC, USA
Co esponding Au ho :
Ve a Z. Eichenaue , KOF Swiss Economic Ins i u e, Eidgen¨
ossische Technische Hochschule Zü ich,
Leonha ds asse 21, Zu ich 8092, Swi ze land.
Email: [email p o ec ed]
Da a A ailabili y S a emen included a he end o he a icle.
Keywo ds
de elopmen finance, o eign aid, o ficial de elopmen assis ance, o ficial c edi s, Sou h-
Sou h coope a ion, China, India, geos a egic compe i ion, geospa ial analysis
In oduc ion
China and India— he wo ld’s wo mos popula ed coun ies—commi ed almos
US$155 billion in aid and c edi o 132 de eloping coun ies be ween 2007 and
2014 alone.
1
Casual obse a ion sugges s ha China and India may be using hei
financial esou ces o compe e o geos a egic and comme cial ad an ages a ound he
globe. Since 2013, China has engaged in an unp eceden ed e o o build a “Bel ”o
oads, ails, po s, and pipelines om China o Cen al Asia and Eu ope and a
“Ma i ime Silk Road”consis ing o deep-wa e po s along he li o al a eas o he
Indian Ocean (B ews e 2015;Mullen and Poplin 2015). India is one o he ew
coun ies in he Asia-Pacific egion ha o mally opposes China’s Bel and Road
Ini ia i e (BRI) (Pan 2017). I also e uses o accep bila e al aid om China. Ac-
co ding o Ag awal (2007, 7), Delhi compe es wi h Beijing o e “diploma ic influence,
oil ese es, and ma ke s o goods.”Jou nalis ic epo s and case s udies also sugges
ha India is sensi i e o any eal o pe cei ed a emp s by China o enc oach upon i s
exis ing sphe es o influence o o he wise engage in expansiona y e o s.
2
Du ing ou
own in e iews wi h decision make s in Delhi, one o ficial om India’s Exim Bank
indica ed ha coun e ing Chinese influence is a conside a ion when he go e nmen
decides on loan and expo c edi app o als. Howe e , o he in e iewees claimed ha
India was “no benchma king China a all”and such claims a e a “media my h.”
3
The exis ing li e a u e is la gely silen on he issue o whe he and how eme ging
powe s use aid and c edi as ools o s a egic i al y. We seek o close his e idence gap
by conduc ing a igo ous analysis o whe he and how India and China use de el-
opmen finance ins umen s o compe e wi h each o he a ound he globe. We fi s
de e mine i he Indian go e nmen alloca es aid and c edi ac oss de eloping coun ies
and hei subna ional locali ies in esponse o he eceip o Chinese go e nmen fi-
nancing. Specifically, we hypo hesize ha i a de eloping coun y ecei es a new
financial commi men om he Chinese go e nmen , i becomes mo e likely ha he
Indian go e nmen p o ides unding o he same ecipien coun y (Hypo hesis 1) and
same subna ional locali y (Hypo hesis 2). We hen e alua e whe he India’s beha io is
consis en wi h he no ion ha i is seeking o compe e wi h China.
4
Those who asse ha Delhi and Beijing use o ficial financial ins umen s o compe e
wi h each o he a ely a icula e alsifiable hypo heses abou go e nmen mo i a ions.
We ollow S einwand (2015, 451) by defining “compe i ion”as he p o ision o
go e nmen financing “ o coun e ac he influence gained by o he dono s.”The e o e,
i he Indian go e nmen esponds o a new Chinese go e nmen -financed p ojec by
inc easing i s financial oo p in in he same coun y o subna ional locali y, we
conside his o be po en ial e idence o India seeking o compe e wi h China. By
Asmus-Bluhm e al. 407
inc easing i s p esence in hese ju isdic ions, Delhi may be able o cons ain o e en
unde mine Beijing’sinfluence in ela i e e ms—ei he a he coun y le el o sub-
na ionally wi h espec o egional go e nmen s o local fi ms. Howe e , o mo e
di ec ly es whe he Delhi seeks o coun e ac ac ual influence gains achie ed by
China, we le e age public opinion da a o de e mine i Delhi assigns special p io i y o
ju isdic ions whe e popula sen imen is mo e o less a o able owa ds India han
China. We also di e en ia e be ween compe i ion o comme cial easons (e.g., o
secu e expo ma ke s) and compe i ion o geopoli ical easons (e.g., o s eng hen ies
wi h egional pa ne coun ies).
Exis ing esea ch on he compe i i e use o de elopmen finance ocuses on i al y
be ween adi ional p o ide s o de elopmen finance (Da ies and Klasen 2019;Fuchs,
¨
Ohle , and Nunnenkamp 2015;Masca enhas and Sandle 2006) and i al y be ween
es ablished and eme ging powe s (Bueno de Mesqui a and Smi h 2016;He nandez
2017;Humph ey and Michaelowa 2019;Zei z 2021). Howe e , o he bes o ou
knowledge, igo ous s udies o eme ging-powe compe i ion ha co e a la ge se o
de eloping coun ies a e non-exis en . One eason is he absence o comp ehensi e and
eliable da a. To be e unde s and whe he and how India and China use o ficial fi-
nancial ins umen s o compe e wi h each o he in de eloping coun ies, we cons uc a
new da ase ha con ains in o ma ion on 1,196 Indian go e nmen -financed p ojec s in
4,308 loca ions wi hin 93 coun ies om 2007 o 2014.
5
In sum, he mone a y alue o
hese p ojec s amoun s o US$14.58 billion (in cons an 2014 alues). The da ase
cap u es o ficial de elopmen assis ance, concessional and non-concessional loans,
expo c edi s, and o he s a e-sponso ed financial flows om India’s wo mos im-
po an sou ces o de elopmen finance: he Minis y o Ex e nal A ai s (MEA) and he
Expo -Impo (Exim) Bank o India. We combine hese da a wi h geocoded Chinese
o ficial financing da a om Bluhm e al. (2020), co e ing 3,485 p ojec s in
6,184 subna ional loca ions wi hin 138 coun ies.
We hen compa e he iming and loca ion o Indian p ojec s wi h hose financed by
China. Specifically, we un eg essions on a sample co e ing 2,333 p o inces wi hin
123 coun ies and es ima e he e ec o Chinese go e nmen -financed p ojec s on he
alloca ion o Indian o ficial financing using a linea p obabili y model wi h coun y-
p o ince- and coun y-yea -fixed e ec s.
6
Ou esul s show ha India’s Exim Bank is
mo e likely o alloca e a c edi -financed p ojec o a subna ional locali y i he Chinese
go e nmen p o ided financing he e in he p e ious yea . We obse e weake e ec s a
he na ional le el. By con as , de elopmen aid p o ided by India’s MEA does no
ollow China’s de elopmen ac i i ies in he a e age ecipien coun y. We only find
ha he MEA alloca es significan ly mo e de elopmen aid in esponse o Chinese
p ojec s whe e i a guably ma e s mos o geos a egic compe i ion: in India’s
neighbo hood. Since ou main finding is mo e obus o India’s Exim Bank, which
p ima ily ollows comme cial objec i es, we conclude ha India is engaging p ima ily
in comme cial a he han geopoli ical compe i ion wi h China.
Ou main analysis ocuses on whe he he dis ibu ion o unding om he Chinese
go e nmen influences he aid and c edi alloca ion decisions o he Indian
408 Jou nal o Conflic Resolu ion 69(2-3)
go e nmen — a he han he e e se ela ionship. India is he mo e likely ollowe
gi en ha Beijing o e sees a subs an ially la ge po olio o o e seas de elopmen
p ojec s (Asmus, Fuchs, and Mülle 2020).
7
Ne e heless, we also es whe he China
compe es wi h India, and consis en wi h ou expec a ion, we find no e idence ha
Indian p ojec s a ac Chinese p ojec s o he same locali ies.
A majo empi ical challenge is disen angling compe i ion om o he ac o s ha
may lead o a posi i e associa ion be ween Indian and Chinese go e nmen financing.
Chie among hese al e na i e explana ions a e selec i i y and imi a ion (Da ies and
Klasen 2019). Selec i i y e e s o he possibili y ha China and India ollow simila
financial alloca ion c i e ia. Fo example, bo h coun ies migh a o ju isdic ions wi h
lowe le els o economic de elopmen o highe -quali y policies and ins i u ions.
Imi a ion e e s o he possibili y ha o eign dono s and lende s—ope a ing in un-
amilia se ings wi h impe ec access o in o ma ion— ake cues om hei pee s wi h
mo e local expe ience and aci knowledge.
We un se e al es s o disen angle compe i ion om selec i i y and imi a ion. Fi s ,
we pa ially accoun o selec i i y in ou eg ession models by con olling o he
a ious alloca ion de e minan s iden ified in he li e a u e ei he di ec ly o indi ec ly
h ough he inclusion o fixed e ec s. Second, we un sec o al eg essions o es
whe he “c owding-in” akes place wi hin he same sec o s. When China p o ides aid
o c edi o a pa icula sec o wi hin a pa icula subna ional locali y, we find no
e idence ha India is mo e likely o app o e aid o c edi o he same ju isdic ion and
sec o in he ollowing yea . I is hus unlikely ha India is simply esponding (mo e
slowly) o he same alloca ion c i e ia han China. In ecogni ion o he ac ha
imi a ion mos likely occu s wi hin sec o s bu compe i ion can occu ac oss sec o s,
his sec o al finding is also inconsis en wi h he al e na i e explana ion o imi a ion.
Thi d, in o de o es whe he India is mo i a ed by a desi e o g ea e influence is-
`
a- is China, we le e age da a om he Gallup Wo ld Poll. We find ha India’s Exim
Bank is mo e likely o inc ease i s financial oo p in in ju isdic ions whe e i is mo e
popula ela i e o China. This is a pa e n ha is di ficul o econcile wi h any ex-
plana ion o he han compe i ion wi h China. Since he c owding-in e ec is also mo e
p onounced in coun ies whe e bo h lende s ha e a simila expo s uc u e, i appea s
ha bo h eme ging economies compe e o e comme cial influence. The e o e, he
weigh o he e idence sugges s ha India is compe ing wi h China a he han simply
imi a ing i o ollowing a simila se o alloca ion c i e ia.
This a icle con ibu es o he li e a u e in se e al ways. Fi s and o emos , i is he
fi s o analyze China-India compe i ion in de eloping coun ies in a quan i a i e
analysis. Second, o he bes o ou knowledge, we p o ide he fi s s udy o local
compe i ion using geocoded de elopmen finance da a o wo bila e al dono s. Thi d,
by including Exim Bank loans in ou analysis, ou s udy con ibu es o a ela i ely small
body o e idence on Sou h-Sou h o ficial financing flows o de eloping coun ies o he
han o ficial de elopmen assis ance (Bun e 2019;Ho n, Reinha , and T ebesch 2021;
Kaya, Kilby, and Kay 2021;We ke , Ahmed, and Cohen 2009). Less concessional and
mo e comme cially-o ien ed p ojec s make up a subs an ial p opo ion o he o ficial
Asmus-Bluhm e al. 409

financing ha Sou he n p o ide s o de elopmen finance commi o hei pee s each
yea , ye hey la gely ep esen a blind spo in he empi ical li e a u e.
A New Da ase : Indian De elopmen Finance a he
P ojec Le el
In collabo a ion wi h AidDa a, a esea ch lab a William & Ma y, we collec ed p ojec -
le el in o ma ion on he wo majo Indian agencies ha p o ide o ficial financing o
o he de eloping coun ies: he MEA and he Exim Bank (see Appendix C o de ails on
he da a collec ion p ocess). The fi s s ep o he da a collec ion p ocess was o e ie e
p ojec -le el in o ma ion om o ficial go e nmen documen s. The esul ing da abase
consis s o 1,196 p ojec s in 93 coun ies om 2007 o 2014. In sum, he mone a y
alue o hese p ojec s amoun s o US$14.58 billion (in cons an 2014 alues), o which
US$9.56 billion we e commi ed by he Exim Bank and US$5.02 billion o igina e om
he MEA. In a second s ep, we alloca ed all p ojec s o (sub)sec o s acco ding o he
OECD-DAC defini ions, anging om “Educa ion” o “Humani a ian Assis ance.”
In a hi d s ep, we geocoded all o he p ojec s in his da abase. Ou 1,196 p ojec s
a e loca ed a 4,308 p ojec in e en ion si es a a ious adminis a i e le els. Ou
da ase accoun s o he a ying le els o geog aphic p ecision and co e age o Indian
p ojec s. As illus a ed in Figu e 1 o he Nepalese case, we c ea ed line ea u es on he
map ha ollow he p ojec ed cou se o in as uc u e p ojec s such as oads and
ailways o iden i y all egions ha we e a ec ed by in as uc u e p ojec s. Fo ou
empi ical analysis below, we hen ex ac ed all fi s adminis a i e uni s h ough which
a line ea u e cu s. The spa ial p ecision o 599 p ojec s is su ficien so ha we can
assign 2,166 p ojec loca ions o hei espec i e p o ince. Figu e 2 p esen s hese
p ojec loca ions in a wo ld map.
Agg ega ing he p ojec -le el da a o he le el o wo ld egions, we obse e ha
India p io i izes A ica and Asia. The A ican coun ies ecei ing mos p ojec s a e
Libe ia, Ghana, Malawi, Mau i ius, and Mozambique. Nepal, A ghanis an, Myanma ,
Bhu an, and S i Lanka op he lis o India’s Asian ecipien s. We also obse e ha he
MEA ini ia es mo e p ojec s han he Exim Bank, while he Exim Bank commi s la ge
amoun s o o ficial financing. In e ms o financial alues, 64 pe cen o India’sfi-
nancing commi men s in ou da ase a e om he Exim Bank, while only 36 pe cen
come om he MEA. In con as , he MEA domina es wi h 88 pe cen in e ms o he
numbe o p ojec s and is ep esen ed in almos h ee imes mo e subna ional loca ions.
This new da ase allows us o es whe he ou expec a ion (explained in mo e de ail
in Appendix B) ha MEA aid is mainly d i en by geopoli ical in e es s and Exim Bank
loans ollow p ima ily comme cial in e es s a e eflec ed in he da a. Figu e 3 shows he
esul s o a one-s anda d-de ia ion change in each o he explana o y a iables on he
logged mone a y amoun o Indian OOF and ODA, espec i ely.
8
In line wi h ex-
pec a ions, comme cial a iables en e significan ly in OOF bu no in ODA eg es-
sions. Specifically, la ge Exim Bank unds (OOF) a e gi en o coun ies o which India
expo s mo e, which is in line wi h he ins i u ion’s manda e. Mo eo e , smalle
410 Jou nal o Conflic Resolu ion 69(2-3)
amoun s o loans flow o mo e indeb ed coun ies, which likely ollows om conce ns
abou he abili y o hese coun ies o epay hei deb . By con as , MEA’s aid alloca ion
(ODA) eflec s i s geopoli ical in e es s. Mo e p ecisely, India’s o ing alignmen in he
UN Gene al Assembly is significan ly co ela ed wi h MEA aid. MEA aid is also mo e
a ge ed owa ds coun ies in India’s neighbo hood, which a e a guably o la ge
s a egic in e es o India. Bo h poli ical a iables, UN o ing and geog aphic dis ance,
do no u n ou o be significan p edic o s o Exim Bank loans. Based on hese esul s
and ou heo e ical conside a ions (Appendix B), we will in e p e India’s MEA e-
sponse o China’so ficial financing ac i i ies as e idence o geopoli ical compe i ion.
Con e sely, we will in e p e India’s esponse o China’so ficial financing ac i i ies
h ough India’s Exim Bank as e idence o comme cial compe i ion.
Empi ical S a egy
We use he geocoded in o ma ion abou he p o incial loca ion o Indian and Chinese
o ficial p ojec s o analyze whe he and how India loca es p ojec s in he same
Figu e 1. Geocoded Indian and Chinese de elopmen p ojec s in Nepal (2000/07–2014).
No es. This figu e illus a es he loca ions o de elopmen p ojec s in Nepal. The g een iangles ep esen
he loca ions o Indian de elopmen p ojec s (2007–2014). The blue lines ep esen line ea u es o Indian
de elopmen p ojec s, including he Te ai Road p ojec . The ed ci cles ep esen he loca ions o Chinese
de elopmen p ojec s (2000–2014). Sou ce: India: Au ho s’da a, China: Bluhm e al. (2020).
Asmus-Bluhm e al. 411
Figu e 3. Ma ginal e ec s o po en ial de e minan s o India’s alloca ion o Exim Bank loans
(OOF) and MEA aid (ODA) (s anda dized coe ficien s, OLS, 2007–2014).
No es. The figu e shows he esul s o leas -squa es eg essions o India’s coun y alloca ion o Exim Bank
loans (in blue) and MEA aid (in ed) o e 8 yea s (2007–2014). The do s ep esen a one-s anda d-de ia ion
change in he espec i e explana o y a iable on he logged mone a y amoun o coun ywide Indian OOF
and ODA, espec i ely ( oge he wi h 90 pe cen and 95 pe cen confidence in e als). All eg essions
include yea dummies. S anda d e o s a e clus e ed by coun y. The numbe o obse a ions is 887 in
119 coun y clus e s. The R-squa ed akes alues o 9.4 pe cen (Exim Bank) and 32.8 pe cen (MEA),
espec i ely. Sou ce: Au ho s’calcula ions.
Figu e 2. Wo ld map o Indian and Chinese go e nmen -financed p ojec loca ions (2000/07–
2014).
No es. Sou ce: India: Au ho s’da a, China: Bluhm e al. (2020).
412 Jou nal o Conflic Resolu ion 69(2-3)
ju isdic ions as China’so ficial financing ac i i ies in he 2007–2014 pe iod. Fi s , we
es whe he India is mo e likely o commi a de elopmen p ojec o a p o ince i China
finances a new p ojec in he same coun y in which he p o ince is loca ed (Hypo hesis
1). Second, we es whe he India is mo e likely o commi a de elopmen p ojec o a
p o ince i China finances a new p ojec in he same p o ince (Hypo hesis 2). To es
ou hypo heses abou he alloca ion o Indian o ficial finance ac oss p o inces, we use a
linea p obabili y model wi h coun y-p o ince- and yea -fixed e ec s. Fo mally, we
un he ollowing eg ession model
IndiaOFij ¼αChinaOFj 1þβChinaOFij 1þc0
ij 1γþξij þψ þϵij , (1)
whe e IndiaOF
ij
is a bina y a iable ha akes he alue one i India launches ei he a
new Exim Bank loan o MEA aid p ojec in p o ince io coun y jin yea ;
ChinaOF
j 1
is a bina y a iable o a new Chinese p ojec in he same coun y in he
p e ious yea 1; ChinaOF
ij 1
is a bina y a iable o a new Chinese p ojec in he
same p o ince in he p e ious yea 1; and c
0
ij 1is he ec o o lagged ime- a ian
con ols a he p o ince le el.
While we use a bina y dependen a iable, IndiaOF
ij
, and bina y a iables o
in e es , ChinaOF
j 1
and ChinaOF
ij 1
, in ou baseline specifica ion, we eplace hem
by con inuous a iables ha measu e he logged mone a y alue o o ficial finance
commi men s in obus ness es s. The la e comes wi h he ob ious ad an age ha i
accoun s o he size o p ojec s. Howe e , one impo an ca ea is ha 39 pe cen o
Chinese p ojec s lack in o ma ion on hei mone a y alue (D ehe e al. 2021,2022).
Mo eo e , gi en ha only 4.2 pe cen o p o ince-yea s in ou sample a e “ ea ed”
wi h Indian and 7.7 pe cen wi h Chinese p ojec s, he use o mone a y amoun s is mo e
likely o be biased by ou lie s. The e o e, ou p e e ed measu e is he bina y p ojec
a iable.
We include he ollowing con ol a iables ha a y ac oss p o inces and ime and
a e lagged by 1 yea : he loga i hm o a e age nigh ime ligh o p oxy he p o incial
le el o de elopmen ; he loga i hm o a e age p ecipi a ion and he numbe o conflic
a ali ies o con ol o empo a y shocks; he logged popula ion le el as a la ge
popula ion migh inc ease he p obabili y o ecei ing a p ojec ; and a bina y a iable
o p ojec s ex ended by he Wo ld Bank o accoun o he egional dynamics o one o
he mos impo an p o ide s o de elopmen finance. Fo he la e , we use loan
p ojec s ex ended by he Wo ld Bank’s In e na ional Bank o Recons uc ion and
De elopmen (IBRD) in Exim Bank loan eg essions and In e na ional De elopmen
Associa ion (IDA) aid p ojec s in MEA aid eg essions. Coun y-p o ince-fixed e ec s
ξ
ij
accoun o ime-in a ian coun y- and p o ince-specific cha ac e is ics (such as
access o he sea, geog aphic dis ance o India, o a ecipien ’s his o ical ies wi h
India).
9
Yea -fixed e ec s ψ
abso b yea -specific ac o s such as India’s budge o
o e seas o ficial finance o changes in he Indian go e nmen . S anda d e o s a e
clus e - obus a he coun y le el. Appendix Table C-4 p o ides de ailed defini ions
Asmus-Bluhm e al. 413
Table 3. India’s MEA Aid and Chinese O ficial Finance (2007–14).
Baseline Timing Placebo Baseline Timing Placebo
(1) (2) (3) (4) (5) (6)
ChinaOF
ij +1
0.009 (0.008) 0.001 (0.009)
ChinaOF
ij
0.001 (0.007) 0.008 (0.009) 0.006 (0.007) 0.008 (0.008)
ChinaOF
ij 1
0.013 (0.013) 0.016 (0.014) 0.012 (0.011) 0.003 (0.008) 0.003 (0.009) 0.000 (0.009)
ChinaOF
ij 2
0.008 (0.009) 0.010 (0.011) 0.001 (0.008) 0.001 (0.009)
ChinaOF
ij 3
0.023 (0.014) 0.016 (0.010) 0.010 (0.009) 0.009 (0.011)
ChinaOF
j +1
0.004 (0.003)
ChinaOF
j
0.002 (0.004) 0.002 (0.004)
ChinaOF
j 1
0.005 (0.003) 0.005 (0.004) 0.007 (0.004)*
ChinaOF
j 2
0.002 (0.003) 0.003 (0.004)
ChinaOF
j 3
0.003 (0.004) 0.002 (0.004)
Con ols 33 3333
Coun y-p o ince FE 33 3333
Yea FE 33 3333
Coun y-yea FE 33 3
Obse a ions 18,673 18,673 16,338 18,657 18,657 16,324
Adjus ed R-squa ed 0.454 0.457 0.451 0.607 0.607 0.600
No es. The uni o obse a ion is he p o ince (ADM1 egion). Dependen and explana o y a iables a e bina y wi h 1 indica ing i a leas one Indian ( espec i ely
Chinese) p ojec is commi ed o a p o ince. All specifica ions con ol o he p esence o Wo ld Bank IDA p ojec s ( -1), log nigh ime ligh ( -1), log p ecipi a ion
( -1), log popula ion ( -1), and log conflic - ela ed dea hs ( -1). Columns 4–6 include coun y-yea -fixed e ec s in addi ion o coun y-p o ince- and yea -fixed
e ec s. Robus s anda d e o s clus e ed a he coun y le el a e p esen ed in pa en heses. Significan a : ***: p< .01; **: p<.05;*:p< .1.
420 Jou nal o Conflic Resolu ion 69(2-3)

amoun s and p ojec coun s a he 99.9
h
pe cen ile o he espec i e dis ibu ion (see
Appendix Table E-3).
These esul s sugges ha India does no ime he p o ision o i s aid o s eng hen i s
geopoli ical ies wi h o he coun ies a hose momen s when China engages mo e
in ensi ely wi h specific coun ies and p o inces ia ODA-financed p ojec s. Howe e ,
his finding may only hold ue o he a e age ecipien coun y. A di e en pic u e
migh eme ge i we look a coun ies whe e India has pa icula ly s ong in e es s.
The e o e, we now u n o an analysis o he e ogeneous e ec s.
Disen angling Compe i ion om Al e na i e Explana ions
Sec o al Decomposi ion. As a fi s a emp o disen angle compe i ion om selec i i y
and imi a ion, we analyze whe he he c owding-in o Indian p ojec s occu s in he same
sec o s o ac oss sec o s. Imi a ion should be isible as co-loca ion o p ojec s wi hin
he same sec o s because o eign financie s o en design and implemen de elopmen
p ojec s in un amilia se ings and wi h limi ed access o in o ma ion, which gi es hem
an incen i e o ollow cues om o he dono s and c edi o s wi h mo e local expe ience
and aci knowledge. Indeed, Da ies and Klasen (2019, 244) no e ha a lack o
Table 4. Sensi i i y Analysis o Table 3.
P ojec s in Response o
No
con ols
(log) $
amoun s
(log)
Coun
Chinese
OOF
Chinese
ODA
Top
ecipien s
(1) (2) (3) (4) (5) (6)
ChinaOF
ij 1
0.002
(0.008)
0.010
(0.007)
0.006
(0.006)
0.011
(0.013)
0.000
(0.011)
0.002
(0.011)
Con ols 33333
Coun y-
p o ince FE
33 33 3 3
Yea FE 33 33 3 3
Coun y-yea FE 33 33 3 3
Obse a ions 19,568 18,657 18,657 18,657 18,657 10,065
Adjus ed
R-squa ed
0.599 0.640 0.753 0.607 0.607 0.591
No es. The uni o obse a ion is he p o ince (ADM1 egion). Dependen and explana o y a iables a e
bina y wi h 1 indica ing i a leas one Indian MEA ( espec i ely Chinese) p ojec is commi ed o a p o ince in
columns 1 and 6, in logged US$ amoun s in column 2, and in logged p ojec coun s in column 3, espec i ely.
Columns 4 and 5 documen how India’s MEA aid commi men s eac owa d Chinese OOF and ODA
p ojec s, espec i ely. Column 6 includes he qua ile o coun ies ha ecei e mos finance om MEA.
Excep o column 1, all specifica ions con ol o he p esence o Wo ld Bank IDA p ojec s ( -1), log
nigh ime ligh ( -1), log p ecipi a ion ( -1), log popula ion ( -1), and log conflic - ela ed dea hs ( -1). Robus
s anda d e o s clus e ed a he coun y le el a e p esen ed in pa en heses. Significan a : ***: p< .01; **: p<
.05; *: p< .1.
Asmus-Bluhm e al. 421
in o ma ion abou he dis ibu ion o local needs and oppo uni ies can p omp go -
e nmen s o “base hei expec a ions in pa on he choices made by o he go e nmen s,
leading o he ding whe eby one dono ’s aid ollows ha o o he s due o he p esumed
in o ma ion [ ha ] hei dona ions con ey.”Likewise, i he co-loca ion o p ojec s was
he me e ou come o selec i i y, i.e., bo h dono s ollowing he same alloca ion c i e ia,
one would expec co-loca ion o occu in he same sec o s. Fo example, a na u al
disas e would ypically lead o Indian and Chinese aid in he same sec o o hu-
mani a ian assis ance i imi a ion o selec i i y was a play. Compe i ion, on he o he
hand, is equally likely o occu wi hin o ac oss sec o s. I India wan s o coun e ac he
influence o China, i can seek o di e en ia e i sel by pu suing p ojec s in sec o s
whe e i has a compa a i e ad an age is-`
a- is China, o i can seek o design and
implemen p ojec s in he same sec o s bu in mo e e ficien , e ec i e, o sus ainable
ways. The e o e, we will seek o de e mine i he ela ionship be ween he eceip o
Chinese go e nmen financing and Indian go e nmen finance is p ima ily d i en by
wi hin-sec o co-loca ion because his would p o ide s ong g ounds o ques ion ou
in e p e a ion o he esul s as compe i ion.
To es his, we eg ess Indian p ojec s in a specific sec o on Chinese p ojec s in he
same sec o . Specifically, we look in o he h ee b oad de elopmen finance sec o s
defined by he OECD—Social In as uc u e & Se ices, Economic In as uc u e &
Se ices, and P oduc ion Sec o s—as well as he h ee la ges na ow sec o s in ou
Indian de elopmen finance da ase (in e ms o p ojec numbe s), which a e Ene gy
Gene a ion & Supply, Heal h, and T anspo & S o age. Panel A o Table 5 documen s
coe ficien s o Exim Bank loans and panel B epo s esul s o MEA aid. We find no
e idence o India being mo e likely o p o ide an Exim Bank loan o MEA aid p ojec
o he same egion and o he same sec o as China in he p e ious yea . All same-sec o
e ec s a e smalle han he significan posi i e agg ega e e ec s o Exim Bank loans in
Table 1 (0.008).
O e all, he co-loca ion o Indian p ojec s does no occu wi hin he same sec o . Ou
esul s a e hus d i en by p ojec s commi ed in he same p o ince bu in di e en
sec o s. I appea s unlikely ha he c owding-in e ec is mainly d i en by imi a ion o
specific ac i i ies o bo h dono s ollowing he same alloca ion c i e ia. Ins ead, his
e idence is in line wi h ou compe i ion in e p e a ion. Howe e , wi h he sec o al
decomposi ion, we canno ully ule ou ha selec i i y and imi a ion d i e he posi i e
associa ion be ween India’s and China’s loan alloca ion. This is why we p oceed wi h
mo e di ec es s o ou compe i ion in e p e a ion.
Public Opinion. As a mo e di ec es o ou compe i ion in e p e a ion o he c owding-
in e ec , we analyze whe he India is pa icula ly esponsi e o new Chinese de-
elopmen p ojec s in ju isdic ions whe e he gap be ween public opinion owa ds India
and public opinion is-`
a- is China is la ge. I Delhi is using i s in e na ional de el-
opmen finance p og am o cons ain o challenge Beijing’s g owing influence, one
migh expec i o ocus on any ju isdic ion whe e China has es ablished a local
p esence and could make a compe i i e gain a i s expense.
15
Howe e , gi en ha
422 Jou nal o Conflic Resolu ion 69(2-3)
Indian policymake s ha e sca ce esou ces and mus make isk-adjus ed ewa d cal-
cula ions, we expec Delhi o p ac ice s a egic en y de e ence, i.e., o inc ease
spending in ju isdic ions whe e i has a public opinion ad an age o e Beijing bu i s
compe i i e (incumben ) ad an age is unde h ea .
One way o p oxy o he ela i e le els o influence enjoyed by wo (po en ially
compe ing) dono go e nmen s is public opinion abou hese dono go e nmen s in
ecipien coun ies. Mos dono go e nmen s ha e policies and p og ams in place o
win he “hea s and minds”o ci izens in hos coun ies (e.g., Blai , Ma y, and Roessle
2022;Die ich, Mahmud, and Win e s 2018;Eichenaue , Fuchs, and B ückne 2021;
Wellne e al., 2024). They unde s and ha public pe cep ions can “fil e up and in-
fluence eli e policy o be mo e amenable o [ hei own] in e es s,”and ha hei s a egic
i als a e seeking o c ea e a mo e a o able public opinion en i onmen o p omo e
hei in e es s (B azys and Dukalskis 2019, 567). The e o e, i one can consis en ly
Table 5. Sec o al Decomposi ion.
Social Economic P oduc ion Ene gy Heal h T anspo
(1) (2) (3) (4) (5) (6)
Panel A: Indian Exim Bank loans
ChinaOF
ij 1
0.000
(0.000)
0.005
(0.004)
0.001
(0.003)
0.007
(0.007)
0.003
(0.002)
0.002
(0.005)
Panel B: Indian MEA aid
ChinaOF
ij 1
0.003
(0.004)
0.010
(0.005)**
0.008
(0.005)
0.001
(0.004)
0.000
(0.005)
0.005
(0.003)*
Con ols 33 3333
Coun y-
p o ince FE
33 3333
Yea FE 33 3333
Coun y-yea FE 33 3333
Obse a ions
(A)
18,657 18,657 18,657 18,657 18,657 18,657
Obse a ions (B) 18,657 18,657 18,657 18,657 18,657 18,657
Adjus ed
R-squa ed (A)
0.226 0.136 0.147 0.161 0.733 0.102
Adjus ed
R-squa ed (B)
0.495 0.565 0.171 0.633 0.585 0.797
No es. The uni o obse a ion is he p o ince (ADM1 egion). Dependen and explana o y a iables a e
bina y wi h 1 indica ing i a leas one Indian ( espec i ely Chinese) p ojec is commi ed o a p o ince. The
column labels indica e he sec o wi hin which he p ojec has been alloca ed. Panel A epo s es ima es o
Exim Bank loans, panel B epo s es ima es o MEA aid. All specifica ions con ol o he p esence o Wo ld
Bank IBRD (panel A) o IDA (panel B) p ojec s ( -1), log nigh ime ligh ( -1), log p ecipi a ion ( -1), log
popula ion ( -1), and log conflic - ela ed dea hs ( -1). All columns include coun y-yea -fixed e ec s in
addi ion o coun y-p o ince- and yea -fixed e ec s. Robus s anda d e o s clus e ed a he coun y le el
a e p esen ed in pa en heses. Significan a : ***: p< .01; **: p< .05; *: p< .1.
Asmus-Bluhm e al. 423
measu e le els o public app o al o wo go e nmen s o e space and ime, one can
e ec i ely p oxy o he ela i e gains and losses ha one go e nmen is expe iencing
is-`
a- is ano he go e nmen in specific ju isdic ions. The Gallup Wo ld Poll p o ides
such da a (Gallup 2018). Each yea , he su ey is conduc ed in mo e han 160 coun ies
wo ldwide. Gallup in e iews a leas 1,000 indi iduals in each coun y and weigh s
hem in a manne ha ensu es he final su ey esul s a e na ionally ep esen a i e. We
use he Gallup Wo ld Poll ques ion “Do you app o e o disapp o e o he job pe -
o mance o he leade ship o [coun y]?”, whe e [coun y] is ei he China o India.
16
This allows us o gene a e a measu e o he dis ance in public app o al a es be ween
he wo coun ies.
Mo e specifically, we augmen ou eg ession equa ion wi h an in e ac ion be ween
ChinaOF
ij 1
and he di e ence be ween he app o al a es o he Indian go e nmen
and he Chinese go e nmen in he ecipien coun y. In column 1 o Table 6,we
compu e he app o al a es only o hose esponden s who p o ided an answe o he
ques ion. Column 2 includes esponden s ha e used o answe o eplied wi h “don’
know”and ea s hese obse a ions as absence o app o al. Acco ding o bo h col-
umns, he coe ficien s on he in e ac ion e m a e posi i e and s a is ically significan a
con en ional le els. This implies ha he inc ease in he p obabili y o a new Indian
Exim Bank loan in esponse o new Chinese de elopmen p ojec s is mo e p onounced
when popula opinion in he ecipien coun y is ela i ely mo e a o able abou India
han abou China.
17
As he insignifican coe ficien s on India’s and China’s app o al
and disapp o al a es in Appendix Table E-4 show, his finding is d i en by he
di e ence in public sen imen owa ds India and China a he han by he absolu e
le els o public suppo o India in hese coun ies. I also holds when we con ol o
na ionalis sen imen .
18
These in e ac ion esul s a e di ficul o econcile wi h any
explana ion o he han dono compe i ion be ween he wo Asian powe s. Replica ing
he analysis o he Indian MEA, we again find no e idence o a c owding-in e ec a e
he commi men o new Chinese p ojec s—no e en in a eas ha hold a mo e posi i e
iew o India ela i e o China (columns 3 and 4 o Table 6).
Comme cial and Geopoli ical In e es s. Imp o ed public opinion ul ima ely se es he
goal o ad ancing a dono coun y’s in e es s. As a final es o ou compe i ion in-
e p e a ion, we di ec ly es whe he comme cial and geopoli ical in e es s a e asso-
cia ed wi h he c owding-in e ec . Specifically, we conside comme cial and
geopoli ical ac o s ha ha e been sugges ed as “ ueling”o in ensi ying compe i ion.
I compe i ion is indeed he d i e o he c owding-in e ec , he e ec should be mo e
p onounced in he coun ies ha ma e mos o Delhi. Con e sely, i is unlikely ha
hese ac o s ma e i he c owding-in e ec is d i en by imi a ion o selec i i y.
Empi ically, we sepa a ely add an in e ac ion o one o wo ‘compe i ion-in ensi ying’
a iables wi h ou a iable o in e es o ou baseline specifica ion.
Fi s , wi h espec o comme cial compe i ion, we expec ha India will be mo e
sensi i e o he eceip o Chinese aid and c edi in coun ies o which China and India
expo simila goods. To es his expec a ion, we calcula e an expo simila i y index
424 Jou nal o Conflic Resolu ion 69(2-3)
Table 6. In e ac ions Wi h Public Opinion, Comme cial, and Geopoli ical Va iables.
Public Opinion Comme ce and Geopoli ics
Exim Bank Loans MEA Aid Exim Bank Loans MEA Aid
(1) (2) (3) (4) (5) (6) (7) (8)
ChinaOF
ij 1
0.014 (0.008)* 0.013 (0.008) 0.017 (0.023) 0.020 (0.021) 0.021 (0.011)* 0.007 (0.004)* 0.016 (0.029) 0.000 (0.008)
ChinaOF
ij 1
×
App o al
dis ance 1
0.091 (0.044)** 0.151 (0.117)
ChinaOF
ij 1
×
App o al
dis ance 2
0.091 (0.053)* 0.191 (0.117)
ChinaOF
ij 1
× ESI 0.073 (0.033)** 0.046 (0.076)
ChinaOF
ij 1
×
BIMSTEC
0.017 (0.020) 0.047 (0.022)**
Con ols 33333 333
Coun y FE 33333 333
P o ince FE 33333 333
Yea FE 33333 333
Coun y-yea FE 33333 333
Obse a ions 5,560 5,560 5,560 5,560 18,577 18,657 18,577 18,657
Adjus ed R-squa ed 0.238 0.238 0.613 0.613 0.266 0.266 0.610 0.608
No es. The uni o obse a ion is he p o ince (ADM1 egion). Dependen and explana o y a iables a e bina y wi h 1 indica ing i a leas one Indian ( espec i ely
Chinese) p ojec is commi ed o a p o ince. Columns 1–4 explo e in e ac ions wi h he App o al Dis ance 1 o App o al Dis ance 2, espec i ely. The a iable
sub ac s he app o al a e o he Chinese go e nmen om he app o al a e o he Indian go e nmen . Columns 1 and 2 epo es ima es o Exim Bank loans;
columns 3 and 4 epo es ima es o MEA aid. Columns 5–8 explo e in e ac ions wi h he expo simila i y index (ESI) and an indica o o coun ies being pa o
he geopoli ical alliance Bay o Bengal Ini ia i e o Mul i-Sec o al Technical and Economic Coope a ion (BIMSTEC). Columns 5 and 6 epo es ima es o Exim
Bank loans; columns 7 and 8 epo es ima es o MEA aid. All specifica ions con ol o he p esence o Wo ld Bank IBRD (Exim Bank loans) o IDA (MEA aid)
p ojec s ( -1), log nigh ime ligh ( -1), log p ecipi a ion ( -1), log popula ion ( -1), and log conflic - ela ed dea hs ( -1). All columns include coun y-yea -fixed
e ec s in addi ion o coun y-p o ince- and yea -fixed e ec s. Robus s anda d e o s clus e ed a he coun y le el a e p esen ed in pa en heses. Significan a : ***:
p< .01; **: p< .05; *: p< .1.
Asmus-Bluhm e al. 425

(ESI). We ollow he seminal con ibu ion o Finge and K einin (1979) and p oxy he
simila i y o he sec o al expo s uc u e be ween India and China in a gi en coun y as
Pn
s¼1MinðXIndia,j
s;XChina,j
sÞ, whe e X ep esen s he espec i e dono coun y’s expo s
o ecipien coun y jin he p oduc di ision sas a sha e o he dono ’s o al expo s o
ecipien coun y j.
19
To mi iga e conce ns abou e e se causali y, we use ade alues
om 2007, i.e., he fi s yea o ou es ima ion sample. The esul ing index anges om
ze o o one, wi h highe alues indica ing mo e simila expo s uc u es. In ou sample,
India and China on a e age ha e he mos simila expo s uc u e in Gambia (0.65),
ollowed by Zambia (0.64), and he index indica es leas oom o comme cial
compe i ion in E i ea (0.03), ollowed by Somalia (0.09).
Second, conce ning geopoli ical compe i ion, we expec ha he Delhi-based MEA
is mo e esponsi e o Chinese ac i i ies in i s neighbo hood, as India’s geos a egic
s akes a e much highe in Sou h Asia han elsewhe e. I he e ec s in India’s
neighbo hood a e s onge , his would suppo ou compe i ion in e p e a ion o he
c owding-in e ec . We in e ac ou a iable o in e es wi h a bina y a iable ha akes
a alue o one i he ecipien coun y is pa o he mul ila e al o ganiza ion o he
egion, Bay o Bengal Ini ia i e o Mul i-Sec o al Technical and Economic Coop-
e a ion (BIMSTEC).
20
We p e e his a iable o e a simple geog aphy-based
neighbo hood dummy because o he long-s anding conflic be ween India and
neighbo ing Pakis an. As Sh i as a a (2005, 973) no es, “[ ]o India, membe ship o
BIMSTEC implies close ies wi h i s eas e n neighbou s, o se ing he influence o
China in he egion, sidelining Pakis an, access o [ he Associa ion o Sou heas Asian
Na ions], secu i y, economic p ospe i y due o [ he ee ade ag eemen ] and clou in
egional and in e na ional a ai s”.
Table 6 p esen s he esul s.
21
As expec ed, we find ha India’s Exim Bank is mo e
likely o co-loca e a p ojec in esponse o a Chinese p ojec in a gi en p o ince i India
and China ha e a simila expo s uc u e in he espec i e coun y (column 5). In
quan i a i e e ms, he likelihood o an Exim Bank esponse is 7.3 pe cen age poin s
la ge in a coun y whe e India and China ha e he same expo s uc u e compa ed o a
coun y whe e India’s and China’s expo s show no o e lap. The likelihood o an Exim
Bank loan inc eases in esponse o Chinese ac i i ies in a gi en p o ince i he expo
simila i y exceeds 0.4 (see also g aphical isualiza ion in Appendix Figu e E-6).
22
This
is u he e idence o comme cial compe i ion o India wi h China.
23
By con as , we
find no e idence ha India’s Exim Bank is mo e esponsi e o China’s engagemen in
i s neighbo hood han elsewhe e (column 6).
We epea he analysis o India’s MEA, which is, as we explained and es ed abo e,
guided o a la ge ex en by geopoli ical mo i es han he coun y’s Exim Bank. Column
7 shows ha India’s MEA is no mo e (o less) likely o espond o a new Chinese
p ojec i i is loca ed in a ecipien coun y whe e bo h eme ging economies ha e a
simila expo pa e n. This is no su p ising gi en ha we ha e seen abo e ha India’s
MEA p ima ily ollows geopoli ical in e es s. By con as , Chinese de elopmen
p ojec s lead o a c owding-in o Indian MEA aid in India’s neighbo hood, he
426 Jou nal o Conflic Resolu ion 69(2-3)
BIMSTEC coun ies (column 8). In quan i a i e e ms, a new Chinese de elopmen
p ojec in he p e ious yea inc eases he likelihood o an Indian MEA aid p ojec
commi men by 4.7 pe cen age poin s i he ecipien coun y is pa o his g oup o
s a egic impo ance o India. The e ec is sizeable in ligh o he a e age likelihood o
a new MEA aid p ojec being se up in a p o ince in a gi en yea (3.7 pe cen ). To sum
up, while de elopmen aid p o ided by India’s MEA does no ollow China’s de-
elopmen ac i i ies in he a e age ecipien coun y, he MEA alloca es i s de el-
opmen aid o compe e wi h China whe e i a guably ma e s mos : in India’s
neighbo hood.
Fu he Checks. A c i ical eade migh be conce ned ha he obse ed co-loca ion o
Indian Exim Bank p ojec s ela i e o Chinese p ojec s is d i en by a boos in local
demand gene a ed by Chinese p ojec s a he han compe i ion.
24
While his is unlikely
o be he main d i e o co-loca ion in ligh o he abo e-documen ed links wi h India’s
ela i e popula i y and India-China expo simila i y, we canno ule ou such an e ec .
To es whe he ou obse ed pa e n migh indeed be d i en by an economic boom
c ea ed by Chinese p ojec s, we epea ou baseline eg ession and add an in e ac ion o
ou a iable o in e es IndiaOF wi h a 1-yea lead o nigh ime ligh s o p oxy o local
g ow h. I an economic boom was d i ing ou esul s, we should obse e a posi i e
significan coe ficien on he in e ac ion e m. Since his is no he case (see Appendix
Table E-6), his u he adds o ou confidence in he compe i ion explana ion o he co-
loca ion o p ojec s.
Nex , we es ima e a spa ial Du bin model (see Appendix E-5) o accoun o spa ial
dependence. Mo e specifically, we allow o he possibili y ha a new Chinese p ojec
in neighbo ing p o inces in he p e ious yea a ec s he alloca ion o Indian p ojec s.
Reassu ingly, ou main finding is obus o accoun ing o po en ial spa ial dependence.
The insignifican coe ficien s on Wx sugges ha he e a e no neighbo hood e ec s o
Chinese p ojec s on India’s p ojec alloca ion. In o he wo ds, he e is no e idence ha a
new Chinese p ojec in he neighbo ing p o inces a ac s a new Indian Exim Bank loan
o , al e na i ely, a MEA p ojec .
Finally, compe i ion be ween ac o s can be one-sided wi h only one pa y eac ing o
he o he bu i migh also be ecip ocal. In a final s ep, we, he e o e, seek o e alua e
whe he China s eps up i s de elopmen ac i i ies when India launches new p ojec s in
coun ies o specific p o inces. The non-findings epo ed in Appendix F sugges ha
while India compe es wi h China h ough de elopmen finance, he opposi e does no
appea o be he case. This is in line wi h he cha ac e iza ion o Che u and Obi (2011,
91) ha India’s s a egy is-`
a- is China is one o “playing ‘ca ch up.’”
Concluding Rema ks
Ou eg ession esul s based on a join sample co e ing 2,333 p o inces wi hin
123 coun ies confi m ha India’s Exim Bank is mo e likely o alloca e a c edi -
financed p ojec o a subna ional locali y i he Chinese go e nmen p o ided financing
Asmus-Bluhm e al. 427
o he p o ince in he p e ious yea . We also obse e co-loca ion e ec s a he na ional
le el, albei o a lesse ex en . Since ou e ec is mo e p onounced in coun ies whe e
India is mo e popula ela i e o China and whe e bo h lende s ha e a simila expo
s uc u e, we in e p e his as e idence o India compe ing wi h China. I is hus unlikely
ha India alloca es p ojec s (mo e slowly) o he same p o ince as China simply
because i ollows he same alloca ion c i e ia as China. By con as , de elopmen aid
p o ided by India’s MEA does no ollow China’s de elopmen ac i i ies in he a e age
ecipien coun y. We only find ha he MEA alloca es i s de elopmen aid o compe e
wi h China whe e i a guably ma e s mos : in India’s neighbo hood. Since we find
obus e idence o compe i ion only o India’s Exim Bank, which p ima ily ollows
comme cial objec i es, we conclude ha India is engaging p ima ily in comme cial
a he han geopoli ical compe i ion wi h China. Ne e heless, ou finding abou India
using aid o compe e wi h China in i s neighbo hood is also o high ele ance since
36 pe cen o Indian aid emains in i s own wo ld egion. Finally, analyzing China’s
possible esponse o Indian de elopmen ac i i ies, we find no e idence ha China
compe es wi h India in he same locali ies.
A fi s sigh , i al y does no need o be de imen al om a de elopmen pe -
spec i e. Ri al ies can lead o mo e aid ac i i ies and his is o be welcomed i aid is
e ec i e.
25
They can also c ea e policy space o de eloping coun ies, allowing hem
o choose he mos compe en pa ne coun y. Compe i ion can also be beneficial i i
leads dono s o s i e o he bes de elopmen solu ions and mo e e ec i e p ojec s
and p og ams. Howe e , esea ch has shown ha s a egically mo i a ed aid is less
e ec i e acco ding o coun y g ow h a es and p ojec e alua ions (D ehe e al. 2013,
2018;Kilby and D ehe 2010). The e a e hus easons o be conce ned abou ad e se
e ec s o he i al ies documen ed in his a icle.
Decla a ion o Conflic ing In e es s
The au ho (s) decla ed no po en ial conflic s o in e es wi h espec o he esea ch, au ho ship,
and/o publica ion o his a icle.
Funding
The au ho (s) disclosed eceip o he ollowing financial suppo o he esea ch, au ho ship,
and/o publica ion o his a icle: This wo k would no ha e been possible wi hou he in aluable
suppo o e iewe s, discussan s and esea ch assis an s (see Appendix A o a ull lis ). Ge da
Asmus-Bluhm, Ve a Eichenaue , and And eas Fuchs a e g a e ul o gene ous suppo om he
Ge man Resea ch Founda ion (DFG) in he amewo k o he p ojec s “The Economics o
Eme ging Dono s in De elopmen Coope a ion”(DR 640/5-1 and FU 997/1-1) and “Empi ical
Analyses o Eme ging Dono s in De elopmen Coope a ion”(DR 640/5-3 and FU 997/1-3).
ORCID iDs
Ve a Z. Eichenaue h ps://o cid.o g/0000-0002-0440-3136
And eas Fuchs h ps://o cid.o g/0000-0002-6309-5954
428 Jou nal o Conflic Resolu ion 69(2-3)
Da a A ailabili y S a emen
The da a ha suppo he findings o his s udy a e a ailable in he suppo ing in o ma ion o his
a icle. We make he Indian De elopmen Finance Da ase , which has been in oduced in his
a icle, publicly a ailabable a h ps://indiande elopmen finance.ne .
Supplemen al Ma e ial
Supplemen al ma e ial o his a icle is a ailable online.
No es
1. We in oduce he Indian o ficial financing da a in he Empi ical S a egy sec ion. Da a on
Chinese o ficial financing a e om D ehe e al. (2021a),D ehe e al. (2022), and Bluhm
e al. (2020). Dolla alues a e in cons an 2014 US dolla s. Fo compa ison, he Uni ed
S a es p o ided US$242 billion in o ficial de elopmen assis ance o e he same ime pe iod
(OECD 2020).
2. Fo example, Ramachand an (2015) no es ha “Indian aid in ensified in 2007 in esponse o
China’s moun ing in e es in he Maldi es.”Likewise, Bhogal (2016) asse s ha “[i]n o de
o check China’s g owing oo p in s in Sou h Asia, India has expedi ed i s own plans o
es ablish links wi h Chabaha po in I an ia A ghanis an.”
3. Au ho s’in e iews we e ca ied ou wi h Indian minis ies, public ins i u ions, hink anks,
and non-go e nmen al o ganiza ions on Sep embe 8–9, 2014 in Delhi.
4. Appendix B ou lines ou a gumen in de ail. I p o ides an o e iew o he mo i a ions ha
migh guide he alloca ion o Indian and Chinese o ficial finance and he condi ions unde
which one would expec hese eme ging powe s o compe e wi h each o he h ough he use
o go e nmen financing ins umen s.
5. The da ase is publicly a ailable a h ps://www.indiande elopmen finance.ne .
6. In ou s udy, we define ‘p o ince’as he fi s subna ional adminis a i e (ADM1) egion
acco ding o he GADM da abase ( e sion 2.8).
7. Du ing ou own in e iews wi h decision make s in Delhi (Sep embe 8-9, 2014), an expe
on Indian aid no ed ha “India is much slowe han China”when i comes o planning and
implemen a ion. The expe e e ed o he Indian-financed A ghani pa liamen building as a
case in poin . The p ojec was ini ia ed by he Indian go e nmen in 2007 and inaugu a ed
in 2015.
8. We p o ide de ails on he a iables used in Appendix C.
9. These fixed e ec s also accoun o a Chinese o Indian de elopmen p esence p io o 2007,
he beginning o ou sample pe iod. We, he e o e, do no wo y ha a “s ock”e ec biases
ou esul s.
10. We acknowledge ha we canno con ol o unobse ed p o ince-specific a iables ha
change o e ime. These could include p o ince-yea -specific need ac o s such as na u al
disas e s ha a ec only pa s o he coun y unde analysis, e en s ha inc ease a p o ince’s
in e na ional impo ance in a gi en yea (e.g., in e na ional summi , ade ai ), and he ime-
a ying domes ic poli ical ele ance o a p o ince ( o example d i en by p o incial o
municipal elec ions). This p e en s us om in e p e ing ou es ima es as causal es ima es.
Asmus-Bluhm e al. 429