Making Inroads: Infrastructure, State Capacity, and Chinese Dominance in Latin American Development

Abstract

In the past decade, Chinese involvement in Latin American infrastructure development has increased dramatically. The influx of Chinese investment along with Chinese construction workers, engineers, and equipment has led scholars and observers to question whether there a distinct model of Chinese infrastructure development. Does China take an integrated approach in Latin America — financing, designing, and executing projects — or does it operate as any other foreign country or company? We develop the concept of infrastructure dominance to answer these questions. Using data on over 400 of the most important public infrastructure projects, we find that China’s involvement in projects varies based on the existing institutional constraints of the host country. Where countries have strong institutions, Chinese companies play a role similar to that of other foreign entities involved in infrastructure development. In Latin American countries with weak infrastructure institutions, however, China plays a very different role — it tends to dominate projects. Thus, this paper highlights the adaptability of the Chinese approach and the importance of domestic institutions for shaping the nature of infrastructure development.