THE EFFECT OF THE BELT AND ROAD INITIATIVE ON DEMOCRACY A Global Quantitative Study of BRI Engagement and Democratic Backsliding

Abstract

The Belt and Road Initiative (BRI) has grown to become one of the most influential instruments of Chinese foreign policy and a major source of development financing for countries across the globe. At the same time, China remains a highly consolidated authoritarian regime. This thesis examines whether it is possible to connect democratic backsliding with involvement in the BRI based on the theory of Economic Statecraft. The thesis analyses the relationship between BRI investments and democracy by studying panel data for BRI and non-BRI countries from 2012 to 2023 using an OLS method (Ordinary Least Squares) and country-year fixed-effects regression, as well as an event study design. The results do not show any statistical significant correlation between BRI investments and democratic backsliding. The result rather points at democratic backsliding being more closely linked to domestic political, cultural and historical conditions. Possible explanations for the lack of findings are however the limited availability and transparency of data on the BRI projects, particularly in more authoritarian states, which limits the measurements on the political impact of Chinese financing.