Using fixed-effects regression analysis, this article demonstrates that China donates more aid dollars to countries which have higher degrees of ethnopolitical competition. This article advances a theory of foreign aid that links domestic political considerations of recipient countries with the desire of donor nations to leverage foreign aid for political gain. States where ethnic identity functions as a relevant political factor – i.e. those states where ethnicity has been utilized by elites to mobilize populations for political purposes – will receive more aid than countries where ethnicity is irrelevant in the domestic political calculus.
Keywords: Politically relevant ethnic groups, ethnopolitical competition, foreign aid