Three Essays on the Role of China in the Developing World

Gregory W. Caskey

Advisor: Tyler Cowen, PhD, Department of Economics

Committee Members: Christopher J. Coyne, Peter T. Leeson

Buchanan Hall, #D100
April 14, 2022, 01:30 PM to 03:00 PM


What are the consequences of the rise of the People’s Republic of China (PRC) for societies in the developing world? This dissertation examines the economic and political consequences of the rise of the PRC for: 1) Nations on China’s periphery and throughout the world, and 2) Ethnic minority groups living within the PRC. Specifically, these essays examine the impacts of Beijing’s economic development policies, including the transnational Belt and Road Initiative, as well as the Chinese Communist Party’s (CCP) violent assimilationist policies towards ethnic minorities in China’s far west Xinjiang Uyghur Autonomous Region.

The first chapter of the dissertation investigates the effects of Chinese development lending and foreign aid upon the political institutions of recipient countries. Utilizing a variety of estimators on panel data for 100+ low- and middle- income countries over the period of 2002-2017, I explore whether China’s growing presence in this domain assists or impedes the institutional health of recipient countries. My findings suggest the presence of an "amplification effect". That is, Chinese development flows amplify the existing institutional orientation of both autocratic and democratic recipient nations. However, this effect exhibits a greater magnitude in autocracies, as sampled autocratic recipients become more autocratic in their institutional orientation relative to the extent to which sampled democracies become more democratic.

The second chapter, published in Public Choice, examines the CCP’s violent assimilationist campaign targeting the Uyghurs, a predominantly Muslim minority group in China that constitutes a population majority in the Xinjiang Uyghur Autonomous Region. Building upon the predatory theory of the state, we highlight the role of heightened political centralization under President Xi Jinping as well as technological changes that reduced the costs of predatory policing in Xinjiang and elevated the perceived economic benefits from integration as the key constraint changes driving CCP decision-makers’ course of heightened repression since 2016. Taken together, we argue these changes altered the cost-benefit analysis for CCP decision-makers, incentivizing their choice of destructive cultural assimilation rather than respect for the rights and autonomy of Uyghurs in Xinjiang.

The third chapter examines the political economy of China’s Belt and Road Initiative (BRI), Beijing’s global infrastructure and policy project involving over 150 nations. Beijing’s clearly stated aims for BRI include that it be characterized by “win-win cooperation that promotes common development and prosperity” between China and participant nations. Building upon the state-led development literature as well as the literature on foreign aid and official lending, I argue that Beijing faces information constraints preventing the successful planning, implementation, and operation of BRI. Taking Beijing’s stated aims as given, I highlight that Beijing undermines their own ability to carry out BRI successfully by employing ill-suited means to achieve their stated ends. Exploring the mechanisms at work on the ground, I utilize BRI contract data and case studies as evidence for the theory.