Working_papers

China's Foreign Aid: Political Determinants and Economic Effects

** *New, greatly revised version available (June 2024)* ** ** *Submitted* ** There has been much speculation on the motives behind the large sums of foreign aid some countries provide to other countries. I address this question in the context of China, which is arguably the largest, most controversial, and most poorly understood donor. Using unique micro data, I find that the Chinese state's goal of domestic political stability drives a significant share of its aid allocation. I first document that in response to labor unrest in China, infrastructure aid contracts are allocated to state-owned firms in the affected areas, resulting in increased employment and future stability. Through existing connections between recipient countries and these firms, local unrest in China also significantly affects the allocation of Chinese aid to recipients. Finally, I exploit this granular variation to develop a novel shift-share instrument for identifying the causal effects of Chinese aid on recipients. I find large positive short-term effects on GDP but few signs of economic growth, household consumption or employment resulting from Chinese aid in the long term. *Media coverage: Project Syndicate, US-China Today, [[VoxDev]](https://voxdev.org/topic/institutions-political-economy/chinese-foreign-aid-can-self-interest-benefit-recipients)* [[pdf]](https://www.jorismueller.com/files/chinaaid_latest_draft.pdf/)

State-Building in a Diverse Society

** *New version available (February 2024)* ** ** **Revise & Resubmit, Review of Economic Studies** ** Diversity can pose fundamental challenges to state-building and development. The Tanzanian Ujamaa policy — one of post-colonial Africa’s largest state-building experiments — addressed these challenges by resettling a diverse population in planned villages, where children received political education. We combine differences in exposure to Ujamaa across space and age to identify long-term impacts of the policy. Analysis of contemporary surveys shows persistent, positive effects on national identity and state legitimacy. Exposed cohorts are also more likely to marry across ethnic lines. Our preferred interpretation, supported by evidence that considers alternative hypotheses, is that changes to educational content drive our results. Our findings also point to trade-offs associated with state-building: while the policy contributed to establishing the new state as a legitimate central authority, simultaneously it lowered demands for democratic accountability. *[[NBER working paper]](https://www.nber.org/system/files/working_papers/w30731/w30731.pdf/)* [[pdf]](https://www.jorismueller.com/files/statebuilding_Ujamaa_latest_draft.pdf/)

The Party and the Firm

This project documents the rise of the Chinese Communist Party’s influence on firms in China over the last decade. We propose novel quantitative measures of Party influence and present recent trends in those measures. We corroborate qualitative work and find a sharp increase in Party influence since 2017. Furthermore, we find that influence has been concentrated in state-owned firms. Domestic private and foreign firms exhibit much lower overall levels of influence, most of which is rhetorical. [[pdf]](https://www.jorismueller.com/files/The_Party_and_the_Firm.pdf/)

The Long-Run Effects of Agricultural Productivity on Conflict, 1400–1900

This paper provides evidence of the long-run effects of a permanent increase in agricultural productivity on conflict. We construct a newly digitized and geo-referenced dataset of battles in Europe, the Near East, and North Africa from 1400–1900 CE and examine variation in agricultural productivity due to the introduction of potatoes from the Americas to the Old World after the Columbian Exchange. We find that the introduction of potatoes led to a sizeable and permanent reduction in conflict. *Media coverage: marginalrevolution.com* [[pdf]](https://www.jorismueller.com/files/Agricultural_productivity_conflict_latest_draft.pdf/)