Does China's aid increase individual happiness of recipient countries?

This paper utilizes an instrumental variables approach to explore the influence of China's aid on the happiness of individuals in recipient countries. The results indicate that China's aid contributes significantly to the happiness of individuals in these countries. Through mechanism analysis, we identify two primary channels: the enhancement of the recipient's infrastructure and the elevation of their income levels. Individual-level heterogeneity analyses highlight a more pronounced effect of China's aid on those possessing advanced education and elevated social status. Country-level analyses further suggest that China's aid has a stronger positive correlation with happiness in countries with more advanced economic structures and superior living standards.