The effects of China on the development of African countries - A synthetic control approach for the case study of Angola

Abstract: This paper explores the effects of the influence of China on the development of African countries, focusing on the case study of Angola. The term development is understood as a multidimensional concept that can be operationalised as a combination of per capita GDP, human development index (HDI) and GINI index. While HDI and GINI index have been analysed from a much more qualitative manner, this study uses the synthetic control method (SCM) to estimate the effect of China on the per capita GDP of Angola. This method compares the trajectory of per capita GDP of Angola after the engagement with China with the trajectory of per capita GDP of a synthetic counterfactual, created by a linear combination of similar countries. Results show that while Angola’s engagement with China has a substantial positive effect on per capita GDP and it has no apparent effect on HDI and GINI index.