Institutional Mismatch and Chinese Aid in the Philippines: Challenges and Implications

Why is Chinese aid attractive to some recipient countries and controversial in others? This study advances the idea that Chinese aid is more attractive in countries that lack or have weak Development Assistance Committee-based aid institutions. When there is a mismatch between a non-DAC donor and a recipient country’s aid regimes, legal and political problems may arise, as the case of Chinese aid to the Philippines in the 2000s demonstrates. As a recipient country, the Philippines is more accustomed to DAC-based rules and practices governing development aid processes, while as a donor country, China’s aid institutions evolved outside the DAC club. The controversies that subsequently arose from institutional mismatch created a public perception that Chinese aid was illegal and prone to corruption, undermining China’s aid objectives.