No full-text available
To read the full-text of this research,
you can request a copy directly from the authors.
Rogue Aid? The Determinants of China's Aid Allocation
Abstract
Foreign aid from China is often characterized as 'rogue aid' that poses a threat to sustainable development. However, no econometric study currently confronts this claim with data. We make use of various datasets, covering the 1956-2006 period, to empirically test whether Chinese aid allocation decisions are guided by need in the recipient countries or by China's national interests such as the access to resources or boosting international alliances. We estimate the determinants of China's allocation of project aid, food aid, medical teams and total aid commitments to developing countries, comparing its allocation decisions with traditional and other emerging donors. We find that political considerations are an important determinant of China's allocation of aid. However, when we compare its allocation to those of other donors, China does not pay substantially more attention to politics in comparison. We find only weak evidence that commercial motives determine China's aid allocation. Moreover, China's allocation of aid seems to be independent of democracy and governance in recipient countries. Overall, denominating aid from China as 'rogue aid' seems unjustified.. We thank seminar participants at the Spring Meeting of Young Economists (Groningen 2011), the European Public Choice Society Meeting (Rennes 2011), Ruxanda Berlinschi, Nils-Hendrik Klann, Eoin McGuirk, Hannes Öhler and Shu Yu for helpful comments on earlier drafts of this paper.
... China's aid challenges the existing aid regimes, because its assistance is independent of political institutions in recipient countries [14]. Traditional donors have been required to adhere to certain rules for providing aid [13,37]. In order to be eligible to aid, African countries must adhere to democratic procedures as well as transparent and non-corrupt governance; however, China insists on a policy of noninterference in the domestic affairs of recipient countries and offers condition-free and sometimes, zero-interest loans to corrupt and undemocratic regimes, hurting efforts to strengthen democracy and human rights in Africa [14,27]. ...
... In order to be eligible to aid, African countries must adhere to democratic procedures as well as transparent and non-corrupt governance; however, China insists on a policy of noninterference in the domestic affairs of recipient countries and offers condition-free and sometimes, zero-interest loans to corrupt and undemocratic regimes, hurting efforts to strengthen democracy and human rights in Africa [14,27]. Traditional donors also criticize that China's aid may overturn and replace the current rules and norms of development assistance [13] and it has been said that China uses aid to compete with the US for regional influence [28]. ...
... Given that China exports manufactured products to Africa in exchange for natural resources, China may be viewed as a neocolonial power in Africa, resulting in its negative image in Africa. 13 At the same time, the exports to China increase the revenue of the resource sector and contribute to the government budget, the latter of which may result in public goods. ...
Using a multivariate framework and the most recently available data that include numerous African countries, this investigation has produced the first extensive statistical evaluation of China’s image in Africa based on China’s various economic relations with Africa, including aid, trade, FDI and contracts. We find that China’s economic development assistance, contracts, and to some degree, trade with African countries contribute to a positive image of China in Africa. In addition, we find that people in African countries of a smaller population, poorer livelihood, less open economy, and better governance tend to have positive views of China’s political and economic influence. With the implementation of the Belt and Road Initiative, Chinese economic activities in recipient countries have been increasing. The implications of this research shed light on how BRI may be received in the host countries and the likelihood of its success or failure.
... Recent analysis suggests that non-DAC and DAC donors may differ in several respects (more notably with the transparency of aid), 6 but these differences may be overblown as both DAC and non-DAC tend to allocate aid for "self-interest" or political considerations (Dreher & Fuchs, 2015;Dreher et al., 2011). In particular, Dreher et al. (2011) find that both DAC and non-DAC donors do not consider the institutional quality of recipient countries and thereby continue to give aid to corrupt countries. ...
... Semrau and Thiele (2017) find that Brazilian aid allocation, an emerging donor, is not sensitive to a recipient country's level of corruption nor its regime type. This is consistent with Dreher and Fuchs's (2015) findings that while political considerations do determine China's aid allocation, it is not substantially more than other donors. Similarly, Broich (2017) documents that Chinese aid does not systematically flow to more African authoritarian regimes. ...
... The average rankings for DAC donors and non-DAC donors are almost equal, 46 and 47, respectively. 18 This is consistent with the few studies determining whether DAC and non-DAC aid are different (Dreher & Fuchs, 2015;Dreher et al., 2011). Although there are specific ways in which DAC and non-DAC donors differ, in general, both are equally poor performers. ...
Despite the rapid growth of non–Development Assistance Committee (DAC) emerging donors, these non‐traditional donors are historically left out of the discussion on aid effectiveness. In this paper, we provide the first full evaluation of aid agency best practices across multiple agency categories. We rank and compare DAC donors, emerging non‐DAC donors, and multilateral and UN agencies in the following five best practice categories: transparency, overhead costs, aid specialization, selective allocation, and effective delivery channels. Contrary to public impressions that emerging donors engage in worse practices, we find that non‐DAC agencies rank similarly to DAC donors: Both groups are equally poor performers. Emerging donors engage in less aid fragmentation across countries and use fewer ineffective delivery channels. Traditional DAC donors, however, provide more transparent reporting. Overall, we find that multilateral agencies and UN donors outperform both DAC and non‐DAC bilateral agencies. Collectively, our results suggest that most aid donors do not meet their own standards for best practices, and this finding is not unique to emerging donors. We highlight how our results reflect the broader political economy of aid allocation.
... As one of the strongest emerging powers and emerging donors, China has been widely studied by scholars who mostly claimed that the intention of China's aid giving has been as a means to secure access to natural resources and to the recipient's markets for trade and investment, as well as to maintain its soft power over recipient countries (Lum et al., 2009;Dreher & Fuchs, 2011;Sun, 2014a). These studies show that China's aid has had little impact on poverty reduction for the above reasons. ...
... Since the establishment of the PRC in 1949, China has been actively engaging in diplomatic relations with its neighboring countries in Asia, and with African countries such as Egypt, Guinea, and Ghana. China provides aid in the form of grants and interest-free loans (Dreher and Fuchs, 2011) as political rewards for countries supporting Beijing. China's aid was mainly given to socialist nations for building stadiums, hospitals, railroads, and other infrastructure. ...
... Scholars like Naím (2007) characterize China's development aid as 'rogue aid' as it is not guided by the needs of developing countries, but rather by China's national interests. However, Dreher and Fuchs (2011) challenged the verdict about China's motives (resources and alliance seeking) saying it is based on selective case studies only and no empirical study exists confirming the various claims about Chinese 'rogue aid'. In their own empirical research, Dreher and Fuchs (2012) claimed that China indeed follows recipient needs when deciding on its aid allocation, favoring countries with low per capita incomes. ...
Since the beginning of bilateral aid giving in the aftermath of the Second World War, the motives for aid giving have changed from being purely political and humanitarian to a mix of different interests. While poverty reduction is frequently stated as the goal of aid giving, it is commonplace for donors to use aid to advance their national interests. The rise of new, emerging donors is creating discussion in both the political and academic fields of aid giving. Traditional or western donors see emerging donors, such as China’s efforts in aid-giving as seeking the natural resources of the recipient countries. This paper provides a historical analysis of the aid-giving motivations underlying an emerging donor, China, and a traditional donor, France. The motives for China’s and France’s aid giving to African countries, with special focus on Guinea, show a great number of similarities.
Keywords: Aid Giving Motives, Emerging Donor, Traditional Donor, Poverty Reduction
... Recent analysis suggests that non-DAC and DAC donors may differ in several respects (more notably with the transparency of aid), 6 but these differences may be overblown as both DAC and non-DAC tend to allocate aid for "self-interest" or political considerations (Dreher & Fuchs, 2015;Dreher et al., 2011). In particular, Dreher et al. (2011) find that both DAC and non-DAC donors do not consider the institutional quality of recipient countries and thereby continue to give aid to corrupt countries. ...
... Semrau and Thiele (2017) find that Brazilian aid allocation, an emerging donor, is not sensitive to a recipient country's level of corruption nor its regime type. This is consistent with Dreher and Fuchs's (2015) findings that while political considerations do determine China's aid allocation, it is not substantially more than other donors. Similarly, Broich (2017) documents that Chinese aid does not systematically flow to more African authoritarian regimes. ...
... The average rankings for DAC donors and non-DAC donors are almost equal, 46 and 47, respectively. 18 This is consistent with the few studies determining whether DAC and non-DAC aid are different (Dreher & Fuchs, 2015;Dreher et al., 2011). Although there are specific ways in which DAC and non-DAC donors differ, in general, both are equally poor performers. ...
... Recent analysis suggests that non-DAC and DAC donors may differ in several respects (more notably with the transparency of aid), 6 but these differences may be overblown as both DAC and non-DAC tend to allocate aid for "self-interest" or political considerations (Dreher & Fuchs, 2015;Dreher et al., 2011). In particular, Dreher et al. (2011) find that both DAC and non-DAC donors do not consider the institutional quality of recipient countries and thereby continue to give aid to corrupt countries. ...
... Semrau and Thiele (2017) find that Brazilian aid allocation, an emerging donor, is not sensitive to a recipient country's level of corruption nor its regime type. This is consistent with Dreher and Fuchs's (2015) findings that while political considerations do determine China's aid allocation, it is not substantially more than other donors. Similarly, Broich (2017) documents that Chinese aid does not systematically flow to more African authoritarian regimes. ...
... The average rankings for DAC donors and non-DAC donors are almost equal, 46 and 47, respectively. 18 This is consistent with the few studies determining whether DAC and non-DAC aid are different (Dreher & Fuchs, 2015;Dreher et al., 2011). Although there are specific ways in which DAC and non-DAC donors differ, in general, both are equally poor performers. ...
... China's approach to foreign aid has been described as low risk because it combines aid with commercially oriented trade and investment [33][34][35]. This risk averse approach to foreign aid in an effort to preserve self-interests is not uncommon [36]. ...
... This risk averse approach to foreign aid in an effort to preserve self-interests is not uncommon [36]. There is sizable literature examining China's motivation for providing foreign aid [37,38] with some indicating that China's motivation for delivering aid was not anchored in goodwill, but rather focused on enhancing private, corporate, or State-Owned Enterprise investments, its economic gains, and advancing its international reputation [34,39]. The consequences of this risk averse approach can be detrimental to the recipient country [40]. ...
Background:
China has played an increasing role in development aid across Africa. Most recently, China has increased its external investments through the Belt and Road Initiative, China's signature infrastructure and trade drive to link China to Asia and Africa. This is likely to result in continuing growth of China's investment in health in sub Saharan Africa. While conflicting opinions have been raised regarding the motivation and value of these investments, few data have been solicited from those directly involved in China-Africa health aid. We conducted a qualitative study to collect information on perceptions and opinions regarding Chinese-supported health related activities in Africa through in-depth interviews among local African and Chinese participants in Malawi and Tanzania.
Results:
Our findings reveal shared experiences and views related to challenges in communication; cultural perspectives and historical context; divergence between political and business agendas; organization of aid implementation; management and leadership; and sustainability. Participants were broadly supportive and highly valued Chinese health aid. However, they also shared common insights that relate to challenging coordination between China and recipient countries; impediments to communication between health teams; and limited understanding of priorities and expectations. Further, they share perspectives about the need for shaping the assistance based on needs assessments as well as the importance of rigorous reporting, and monitoring and evaluation systems. Our findings suggest that China faces similar challenges to those experienced by other longstanding development aid and global health donors. As it continues to expand cooperation across Africa and other regions, it will be important for China to consider the issues identified through our study to help inform collaborative and effective global health assistance programs. The insights garnered from this research are not only relevant to China's engagement in Africa but for other global health assistance donors as well.
... Interest in the relationship between aid and natural resources has grown dramatically in recent years because of the role of China and other 'new' donors offering foreign assistance to mineral-and land-rich African countries (Fuchs and Vadlamannati, 2013;Dreher and Fuchs, 2015;Dreher et al., 2018). 1 However, the flow of foreign aid to resource-rich economies is a long-standing phenomenon and several resource-rich, low-income countries have historically received amounts of foreign aid that are even larger than their revenues from natural resources from standard OECD donors (Dobronogov and Keutiben, 2014). Yet, to date, the research looking at the interplay between these two potential 'curses' and the political economy of recipient countries over the past decades remains scant. ...
... At the same time, our analysis sheds an interesting light on the recent debate on whether China's aid to African countries is somehow linked to their natural resources and land, and to non-democratic regimes. The latest studies find that there is little empirical evidence that China is targeting aid flows at certain regimes to access their resources and land, but it is rather the Chinese private sector intervening in these countries that shows an explicit interest in the resources (Dreher and Fuchs, 2015;Dreher et al., 2018). Our analysis suggests that we should also consider the political economy of this official government assistance on the recipients' political incentives, even if the donor's intentions are not exploitative. ...
In this article we examine whether foreign aid and natural resources can act as a double curse on developing countries with poor governance. We hypothesize that affording external liquidity to dictators based on their resource wealth reduces the political incentives for long term investment and enhances the looting of the country and more frequent irregular exit of leaders from their office. We then examine the empirical evidence for such a link between international aid flows and government irregular turnover in resource-rich countries. We find that the interaction between natural resources and most forms of international aid combines with political instability in the case of non-democratic regimes. In turn, this combination of foreign aid, natural resources and political instability is associated with lower growth performance. Some types of less fungible aid (notably humanitarian) and aid grants that do not build indebtedness do not seem to have this effect.
... In an article for Foreign Policy, Naim (2007) described Chinese aid a 'non-democratic, non-transparent, rogue, and toxic', accusing China of prioritizing its national interests over recipient needs. This criticism was reinforced when US presidential candidate Hillary Clinton publicly voiced her concerns about Chinese aid (Dreher & Fuchs, 2011). On the other hand, proponents have praised China's responsiveness to recipient needs and its avoidance of heavy administrative burdens on African states (Bräutigam & Knack, 2004;Dreher et al., 2016). ...
Does foreign aid reshape citizen views on governments? How does Chinese aid relate to corruption perception in African local governments? Studying 33 African countries from 2000 to 2014 (175 590 respondents), Chinese aid heightens perceived corruption in local councillors and officials. Corruption scandals likely contribute to negative views of both China and local governance. Control variables like World Bank aid and Confucius Institutes disprove alternate theories. Heterogeneous effects demonstrate that China's aid is unwelcome among low‐skilled individuals who feel threatened by its expansion, magnifying corruption perception. This suggests that Chinese aid's unfavourable image fosters scepticism among African citizens and undermines collaborating local governments.
... Further, the findings of this study contribute to the literature on political regimes, centralization and party politics, and democracy and economic development. A key question in China-Africa studies is whether China is actively trying to support and strengthen authoritarian regimes (Broich 2017, Dreher andFuchs 2011). But my findings suggest that the influence may be more indirect, where African authoritarian or one-party dominant states are, on average, more aggressive in negotiating investment deals around local participation than multi-party democracies, which may or may not be reinforcing their performance legitimacy and political rule. ...
... Thus, China is seen solely interested in exploiting Africa's resources for their economic and industrial development. Nevertheless, studies indicate that most of these claims lack reliable empirical evidence [6,7]. ...
Infrastructure procurement has been a major engagement route between China and
Africa. This contributes immensely to the gradual infrastructure development seen on the continent. However, maturing discourse purports that these infrastructure collaborations lack intentionality in the continuous development of strategic guidelines and policies for effective implementation despite their uniqueness and criticality. This study proposes that an efficient approach to policy recommendations is through the political and economic analysis (PEA) of these partnerships using public-private partnership (PPP) optics. Unquestionably, these partnerships are representative of the concept of diplomatic transnational public-private partnership (DT-PPP) where infrastructure is procured through the collaboration of public (African governments) and private sector (Chinese state-owned corporations) who provide the managerial, financial, and technical resources for the project implementation. Given the quest for sustainable win-win, this study identifies strategies towards the realization of win-win in the implementation (i.e enablers of win-win) such that fairness and co-benefit, as well as interests, will be achieved. Thus, based on the PEA framework, case scenarios from Ghana and Nigeria using expert interviews identify the criticalities and best practices for the realization of these enablers at the development phase. Findings indicate more effort is required of the public sector (African host countries) in terms of people, structure/institutions, and the implementation processes. Recommendations include improvement
of environmental management structures, contract administration procedures, external
stakeholders/local community engagement mechanisms, knowledge and technology transfer
procedures, and sector-based project operation and maintenance culture and systems. Additionally,
actors must have emotional intelligence, good problem-solving abilities, and overall ensure cordial
relationships for continued bilateral cooperation.
... The characterization of Chinese aid as "rogue aid" (Dreher & Fuchs, 2011;Mohan & Power, 2009;Naim, 2009) is founded on allegations that it strengthens autocracies and dictators, exploits developing nations, and sabotages efforts by the West to reinforce institutionalism and democracy (Corneliussen, 2021). Most criticism has, arguably, focused on the political intentions of China. ...
China’s rise to global prominence has been coupled with a development aid approach and narrative that contradicts long-standing Western-oriented models and discourses. Despite the existence of tangible development projects that bear testimony to Chinese aid to developing countries and which clearly espouse the principles upon which the aid is founded, critics continue to allege that the aid is a façade that enables China to advance its political ideology and vision. Using a corpus-based approach, we investigated the extent to which China’s political discourse finds its way into the development aid discourse either by senior party officials or through a government-managed collaborative translation mechanism. To do so, we designed a monolingual corpus of the speeches of top-ranking CPC party officials presented at party-organized events and bilingual (Chinese–English) corpora of the discourse used by Chinese government officials during development aid exchanges. We extracted political terms, based mostly on their frequency of use, from the monolingual corpus and verified the extent of their presence in the bilingual corpora of the development aid discourse. Furthermore, we studied the terms and their contexts of use in the bilingual corpora to determine whether translation served as a medium through which China’s political discourse was possibly being introduced into its development aid discourse. Our investigation led us to conclude that China’s development aid discourse contains an insignificant amount of political terminology mirroring China’s own development path. We also concluded that translation did not constitute, in any tangible way, a means by which the presence of China’s political discourse in its development aid discourse could be enhanced. However, we uncovered issues related to terminology management, literal translation, and machine translation which suggest that China was struggling to cope with preserving source text and, presumably, target text linguistic and cultural elements, while taking advantage of current advances in translation technology. We propose both structural and translational modifications that could help China curb anti-development aid criticism while enhancing its development aid discourse.
... The fourth moment (1990)(1991)(1992)(1993)(1994)(1995) was characterised by a search for greater diplomatic support in the international game, by an increase of foreign aid and by a less ideological foreign policy strategy. From that moment on, China formed the bases for its future aid strategy, identified by a strong link between aid, investment, and trade (Dreher & Fuchs, 2011). In this phase, the introduction of beneficial loans in 1995 marks a big change in China's foreign aid policy. ...
El presente estudio analiza la tipología y estructura de la Ayuda China a América Latina y el Caribe (ALC), considerando las características de este tipo de Cooperación Sur-Sur en el contexto de la política de ayuda y los objetivos estratégicos de China en esta región. Los resultados del estudio revelan los diferentes patrones en la estructura de la ayuda china a las subregiones de ALC. Estos patrones indican que los fondos más importantes se concentran en proyectos de desarrollo y comerciales en América del Sur; que prevalecen las subvenciones en el caso del Caribe; y la ayuda de representación, que no necesita mayores recursos, está asociada a Centroamérica. Como afirma Wan (2018), esto demuestra que la ayuda de China tiene un papel estratégico a nivel global. Palabras-clave: Cooperación Sur-Sur, Cooperación China, Ayuda Bilateral, América Latina.
... En efecto, y tomando como derrotero las líneas argumentativas de Lin y Wang (2017), la estrategia de Cooperación Sur-Sur antes mencionada que ha venido gestionando China es diferente a la lógica de Cooperación Norte-Sur. Precisamente, las dinámicas de la cooperación del gigante asiático han reflejado un nuevo modelo de colaboración que, no solamente se reduce a los acuerdos comerciales, sino que desarrolla una mixtura de inversiones, préstamos y créditos, lo que ha abierto la ventana a países con problemas financieros para poder acceder a los mercados internacionales con financiamiento (Dreher y Fuchs, 2012). ...
El objetivo del artículo es realizar una breve descripción del comercio bilateral entre EE. UU. y América Latina con China antes de la pandemia y cómo el nuevo orden que se avecina puede repercutir en los países latinoamericanos. La metodología es de corte cualitativo y el método es de revisión documental por matrices. La principal conclusión es que América Latina construye relaciones heterogéneas con China. No obstante, se puede afirmar que el acercamiento entre ambos va en concordancia con el crecimiento económico impulsado por las exportaciones, el fomento a la inversión, así como una alternativa frente a los mercados internacionales de EE. UU. y la Unión Europea.
... Also, 'Rogue aid? The determinants of China's aid allocation' pointed out that empirical research says that improving the data transparency of international aid is a beneficial method to resolve suspicions from other countries [8]. From this, scholars have given a systematic introduction with data to China's international aid in Africa. ...
... A significant portion went to low-income developing countries, the African continent in particular (Amusa, Monkam, & Viegi, 2016). Although it is independent of recipient countries' institutional characteristics, such as democracy and governance, China's aid decision is no more shaped by political and commercial interests than that of other donors (Dreher & Fuchs, 2011). 2 The concept of "rogue aid" was used to describe aid that cares little about the long-term well-being of the recipient (Naím, 2007). ...
The challenge in evaluating China's foreign aid has always been the unavailability of reliable data sets. This study constitutes the first analysis of the AidData data set from a communication network perspective. It examines China's development aid to Africa in the ICT sector from 2000 to 2014. Combining data mapping, network modeling, and regression, it uncovers general trends of aid allocation, central players, and collaboration patterns among aid agencies. The results demonstrate the variability in the distribution of China's foreign assistance to 44 African countries. In particular, African countries with less population, worse economic development, but higher oil rents are more likely to receive ICT aid from China. This study also finds that aid implementation is less likely to occur through collaboration within the same sector or between state-owned enterprises (SOEs) and private companies. This research reveals nuanced geometries of aid with "Chinese characteristics" that move beyond the extractive "Angola model" or the mutual benefits model. These findings provide implications on how Chinese telecommunication companies are shaping Africa's digital future.
... A significant portion went to low-income developing countries, the African continent in particular (Amusa, Monkam, & Viegi, 2016). Although it is independent of recipient countries' institutional characteristics, such as democracy and governance, China's aid decision is no more shaped by political and commercial interests than that of other donors (Dreher & Fuchs, 2011). 2 The concept of "rogue aid" was used to describe aid that cares little about the long-term well-being of the recipient (Naím, 2007). ...
The challenge in evaluating China's foreign aid has always been the unavailability of reliable data sets. This study constitutes the first analysis of the AidData data set from a communication network perspective. It examines China's development aid to Africa in the ICT sector from 2000 to 2014. Combining data mapping, network modeling, and regression, it uncovers general trends of aid allocation, central players, and collaboration patterns among aid agencies. The results demonstrate the variability in the distribution of China's foreign assistance to 44 African countries. In particular, African countries with less population, worse economic development, but higher oil rents are more likely to receive ICT aid from China. This study also finds that aid implementation is less likely to occur through collaboration within the same sector or between state-owned enterprises (SOEs) and private companies. This research reveals nuanced geometries of aid with "Chinese characteristics" that move beyond the extractive "Angola model" or the mutual benefits model. These findings provide implications on how Chinese telecommunication companies are shaping Africa's digital future.
... 4 Sánchez Pacheco (2007:155) entrecomilla esta sentencia de Mao: «Cualquier cosa a la que los imperialistas se opongan, nosotros la apoyaremos; si los imperialistas se oponen a esto -el ferrocarril-nosotros la patrocinaremos». Son notables los paralelos con ciertos juicios de la «ayuda pícara» («rogue aid») actual practicada por China (Naim 2007;Dreher & Fuchs 2011;Domínguez 2015). En contraste con el fracaso del COMECON, el rápido avance de la integración económica europea será sobresaliente, ya que la Comunidad Económica Europea pasará desde ser una zona de libre cambio en 1957 a convertirse en una unión aduanera en 1968, año y medio antes de lo previsto en el fundacional Tratado de Roma, ante el éxito económico que acompañó la década. ...
Fecha de recepción: noviembre de 2017 Fecha de aceptación y versión definitiva: diciembre de 2017 resumen: Tras describir el contexto de los años sesenta en el que nace la encícli-ca de Pablo VI, enfatizando la diversidad y heterogeneidad entre y dentro de los bloques geopolíticos, el trabajo comenta las principales propuestas de la Populorum progressio que aún tienen vigencia y finaliza comparando cuatro posibles modelos de desarrollo que conviven en la actualidad: el liberal, el de bienes públicos globales, los altermundistas y el centrado en valores, reseñando sus principales fortalezas y amenazas. PAlAbrAs clAve: desarrollo humano integral; populorum progressio; valores. AbstrAct: This paper begins with an analysis of the historical context in which Paul VI's encyclical was born, with special emphasis on diversity between, and within, the main geopolitical blocks. It then discusses Populorum Progressio's main proposals, leading to a comparison of four present-day models of development: liberal, those based on public global goods, alter-globalists and those centered on ethical values.
... The eight guiding principles of Chinese international aid 21 , coincide with the Paris Declaration on Aid Effectiveness on certain points such as ownership, alignment and results-orientation. 22 Similarly, many of the Chinese cooperation practices that are criticised have been extensively followed by traditional donors and/or have not been completely eradicated. A quantitative study shows that Chinese aid has not, historically , been more conditioned by its interests, whether economic, diplomatic or security and defence-related than those of traditional donors 23 . What is more, in recent years, since the start of the 'war on terror' and the international economic crisis, we have also seen increased linking of the security and defence interests of the traditional donors with the allocation of their development cooperation. ...
... Other scholars examined how multilateral donors' aid allocation was influenced by important member countries, notably board members (Barnebeck et al. 2006;Kilby and Fleck 2006a;Kilby 2006;Kaja and Werker 2010). Some studies also focus on the influence of domestic politics and lobbying in the donor country (Anwar and Michaelowa 2006;Kilby and Fleck 2006b;Tingley 2010;Dreher et al. 2015b), and the most recent strand of the literature analyzes the so-called "new donors" like China or India and examine how their aid allocation differs from the one of the more traditional donors (Dreher et al. 2011;Fuchs and Vadlamannati 2013;Dreher et al. 2015a;Dreher and Fuchs 2016). ...
Development assistance is increasingly used to fund the provision of global public goods. However, in this case, the traditional classification of donor interests and recipient needs is not appropriate for analyzing donors’ aid allocation decisions. Given the non-excludability characteristic of global public goods, aid targeting the provision of such goods should not flow to those places with the greatest needs – as assumed by the existing aid allocation literature – but to those where they can be provided most efficiently. After explaining the theoretical rationale behind this claim, we empirically show its implication at the example of aid for climate change mitigation (a global public good): At first glance, aid for mitigation appears much more donor-interest driven than aid for adaptation (a private or local public good) or than general aid where the consideration of recipient need seems to play a greater role. The picture changes when including appropriate control variables for mitigation efficiency. As the latter is positively correlated with economic development, donors allocating their aid in line with mitigation efficiency may be wrongly accused of allocating aid in their own interest. While the control for efficiency-related variables solves the attribution problem for individual public goods, it is difficult to conceive of appropriate controls at the aggregate level. This represents a major challenge for the aid allocation literature and implies that holding donors accountable for their overall aid portfolio will become difficult in the future.
... Another set of studies have analysed whether emerging donors (especially China) show a different pattern from those in the DAC ( Lum et al. 2009;Doucouliagos and Manning 2009;Dreher, Nunnenkamp, and Thiele 2011;Dreher and Fuchs 2011;or Shushan and Marcoux 2011; for the aid to Arab states),as emerging donors also respond to lobbying ( Lahiri and Raimondos-Moller 2000). Broadly speaking, the conclusion is that new donors are careless of aid-partner countries, they are not considering corruption to allocate their resources -both new and old donors-, and exhibit a weaker bias towards badly governed countries, whereas old-DAC donors tend to consider their commercial interests distort the allocation of aid. ...
The article starts from the Multidimensional Poverty Index (MPI) methodology and measures (Santos et al. 2015) available, and uses them to compare the current disbursements of Official Development Aid (ODA) with MPI-related deprivations and indicators. In particular, the six deprivation dimensions are matched with the current sectorial classifications contained in the OECD-CRS database. This empirical exercise allows making a comparison between ODA donors' current disbursements (priorities) and normative disbursements, if the MPI were taken as the rule in order to attain the objective of real poverty eradication. Important political consequences of this counterfactual exercise are deduced: Latin American development agencies (ministries or departments) should start to register ODA flows using the multidimensional poverty dimensions (housing, basic services, standard of living, education, and employment, and social protection); donors (both North-South and South-South Cooperation) should focus their resources and priorities on the MPI structure, increasing re-cipients' ownership of development strategies and interventions. This information and way of delivery may make it possible to focus the evaluation of ODA flows more deeply on their impact on poverty, in line with Busan's recommendations and the post-2015 development agenda (SDG 1).
The paper aims to scrutinize the nexus between development aid, economic growth, poverty, and inclusion in Africa in the short and long run. After compiling the theoretical and empirical foundation of aid effectiveness literature, the statistical analysis is conducted in three scenarios. First, a panel data analysis was conducted from 1977 to 2018 for 34 African countries to explore the interface between Official Development Assistance (ODA) and economic growth in the long run. The second scenario presents ODA's short-term and long-term marginal effects on poverty reduction. The last scenario examines the direct effect of ODA on inclusive development. The statistical results show that aid effectiveness varies across nations. In the short-run, out of the 34 countries, only five countries have a positive marginal efficiency of ODA in terms of economic growth. However, only in one country (Nigeria) is the marginal efficiency of ODA arguably found to be positive in the long-run. The poverty elasticity of ODA is found to be negative in all countries. Finally, the random effects regression shows that ODA arguably contributes negatively to inclusion. Multiple factors may cause statistically negative relationships and should not be ignored due to the suspicion of an endogeneity problem. This is the unique selling point of this paper, as it discusses the potential causes. Statistical findings may not fully explain aid effectiveness because benefits and drawbacks may differ from national interests and project to project. Furthermore, aid may have different long-and short-term consequences. Given all the limitations, the statistical analyses in this paper show that development aid should have strategic crosscutting focus areas inter alia human development, technology, environment, demographic change, good governance, trade, and economic equity.
The paper aims to scrutinize the nexus between development aid, economic growth, poverty, and inclusion in Africa in the short and long run. After compiling the theoretical and empirical foundation of aid effectiveness literature, the statistical analysis is conducted in three scenarios. First, a panel data analysis was conducted from 1977 to 2018 for 34 African countries to explore the interface between Official Development Assistance (ODA) and economic growth in the long run. The second scenario presents ODA's short-term and long-term marginal effects on poverty reduction. The last scenario examines the direct effect of ODA on inclusive development. The statistical results show that aid effectiveness varies across nations. In the short-run, out of the 34 countries, only five countries have a positive marginal efficiency of ODA in terms of economic growth. However, only in one country (Nigeria) is the marginal efficiency of ODA arguably found to be positive in the long-run. The poverty elasticity of ODA is found to be negative in all countries. Finally, the random effects regression shows that ODA arguably contributes negatively to inclusion. Multiple factors may cause statistically negative relationships and should not be ignored due to the suspicion of an endogeneity problem. This is the unique selling point of this paper, as it discusses the potential causes. Statistical findings may not fully explain aid effectiveness because benefits and drawbacks may differ from national interests and project to project. Furthermore, aid may have different long-and short-term consequences. Given all the limitations, the statistical analyses in this paper show that development aid should have strategic crosscutting focus areas inter alia human development, technology, environment, demographic change, good governance, trade, and economic equity.
The Dissertation’s overarching goal is to offer an analytical tool for initiatives aimed at mainstreaming inclusive development in sub-Saharan Africa so that relevant theories, principles, key driving factors, and policy instruments of inclusive development are well comprehended. First, the dissertation focuses on compiling pertinent theories of inclusive development. It also tries to illustrate how social systems contribute to exclusion and the fragility of nations. Additionally, it empirically demonstrates the significance of certain driving factors of inclusive development. It also aims to provide some theoretical foundations for strengthening and expanding regional integration in Africa, to ensure inclusive decision-making at supra national level. Finally, seven policy domains are identified to mainstream the virtue of inclusiveness and its principles. i) Promoting “right-based” development approach, particularly those approaches that are endorsing on economic equity and social justice; ii) Focusing on the exclusionary role of hierarchical social structures and economic inequality as root causes of exclusion; iii) Capitalizing on the demographic dividend through inclusive labour market; iv) Effectively utilizing official development assistance (ODA); v) Promoting social protection programs; vi) Deepening and broadening African regional integration; and vii) Adapting the so-called social market economy development path.
El propósito del libro fue llamar a contribuciones que cuestionen, y en lo posible, trasciendan, los análisis convencionales que la industria académica de la ayuda, endosa sobre la cooperación y su arquitectura, como parte del imperialismo epistemológico de la corriente principal de las teorías de relaciones internacionales y del desarrollo
This dissertation explores the social and ecological footprint of China aid in the West
African country of The Gambia. Since the two resumed diplomatic relations in 2016,
China intensified its foreign aid—particularly infrastructural support— to the
country. Alongside the bilateral aid, in the context of China’s growing global
economic ambition, there has been the heavy presence of Chinese-owned fishmeal
factories in The Gambia’s southwest coast region. Against this backdrop, it is argued
here that Chinese aid is a foreign policy strategy for natural resource exploitation by
Chinese companies in the country, coupled with far-reaching socio-ecological
footprints in the fishmeal-stationed-communities of The Gambia. The nature of this
contention is both theoretical and empirical. Theoretically, the paper builds upon the
political ecology framework to underscore an interplay between China aid and
resource exploitation by Chinese fishmeal plants, as well as the subsequent socioecological
stress in the local communities of The Gambia. Empirically, a case study of
three villages was conducted to properly determine the socio-ecological footprints of
the fishmeal plants. The findings reveal some social benefits but primarily far-reaching
livelihood and ecological disruptions in the fishmeal localities.
Using a novel dataset on Chinese large-scale overseas investment and project contracts by sector and mode of entry, we analyze whether Chinese outward activity (COA) before the Great Recession worsened or alleviated the contractionary phases in developing countries. We find that, on average, COA did not increase recessionary vulnerability. Both sectoral targeting and the size of pre-crisis engagement matter. While COA in financial market sectors implies an aggravation, substantial pre-crisis investment in energy, metals and transportation industries tends to attenuate the slump. Additionally, the mode of entry, i.e. through either greenfield investment or mergers and acquisitions, also matters.
The aftermath of the Financial Crisis has seen an increase in China Official Development Assistance (ODA) extended to Sub-Sahara Africa (SSA) countries. This paper falls under literature that addresses changes in the structure and functioning of participants in international financial flows. It shows SSA countries’ preference of China ODA as opposed Western ODA that ties aid to stringent conditionality among other reasons. The paper shows a build-up in China ODA as opposed to a low steady assistance flow from Western countries over time.
With the recent influx of China ODA on the SSA market that is termed to be obscured by Western countries, we correlate the annually disbursed China ODA on the Africa market with the intended infrastructure development. The outcome indicates a link between China ODA and growth in the SSA infrastructure and construction sector. However, despite an increase in China ODA to SSA infrastructure and construction sector, the growth rate is slow as compared to the huge amounts injected in the sector given the capital nature of the projects that will only actualise economic gains after some time.
On the backdrop of United Nations (2019) reporting Sub-Saharan Africa (SSA) facing a dilemma between financing development needs and addressing debt vulnerabilities, we formulate China ODA to SSA debt ratio. The results show that China cheap loans and investment extended to Sub-Sahara Africa have contributed to the surged-up debt in the region. The highest ratio was recorded at 55 percent in 2016 when China offloaded US$ 30 billion on the SSA market. In light of financing development needs at the expense of addressing debt vulnerabilities, we conclude by postulating how SSA countries may address the dilemma.
The paper empirically investigates the effects of governance (GGov), official development assistance (ODA), sustainability [adjusted net savings (ANS)], and macroeconomic variables on the quality of life [human development index (HDI)] for selected sub‐Saharan African (SSA) countries using the most recent data from 2000 to 2017. The study employed different panel techniques. The findings provide insightful and interesting empirical results that resonate with the magnitude of a significant of the role of GGov on ANS and HDI. Our study shows that GGov is important to improve HDI. Additionally, ANS has important implications on the well‐being of human existence in SSA. In addition to these, this study found that macroeconomic variables such as trade openness and economic growth, wealth, and opportunity creation factors like urbanization and electrification rate are essential. Furthermore, empirical results revealed that ODA has a negative and significant association with HDI, which is in line with some of the existing literature. Our findings have several implications for organizations such as the World Bank, International Monetary Fund, and African Development Bank. This study serves as a policy instrument and guides in coordinating SSA on promoting HDI.
This article focuses on the effectiveness of Chinese developmental aid in Sub-Saharan Africa. The two main research questions are (1) whether Chinese development aid has a positive effect on economic growth in Sub-Saharan Africa; and (2) whether this impact is conditional on other factors. To examine these theoretical propositions, I analyze panel data covering 51 countries from the SSA over the 2000–2014 (15 years) period using FGLS estimations and 2SLS-IV estimations with two exogenous instrumental variables. The results show that Chinese Official Development Assistance (ODA) boosts economic growth. More specifically, Chinese ODA and grants work effectively in countries with anocratic regimes and in a scenario in which there is no US aid presence. Our findings shed light on the competition between China and the US for regional influence via developmental aid.
Este trabalho pretende investigar nas motivações subjacentes à cooperação para o desenvolvimento (CpD) da China com Angola. O primeiro contacto entre a China e Angola teve lugar na década de 50 do século passado quando o povo angolano estava a lutar pela independência nacional. Durante o seguinte meio século, a China envolveu-se na guerra anti-colonial e guerra civil de Angola e estabeleceu relações diplomáticas com Angola em 1983 mas, no geral, teve pouco influência neste país da África Austral.No entanto, esta situação foi mudada em sequência do fim da guerra civil angolana em 2002. Neste ano, a reconstrução nacional foi colocada no topo da agenda de Angola e a China começou a consolidar a sua presença lá através de desenvolver projetos de CpD. As relações de cooperação atraíram atenções globais, não só porque Pequim investiu uma grande quantia de dinheiro para financiar a construção de infraestruturas angolanas, mas também porque foram detetadas algumas particularidades na forma de desenvolvimento dos projetos de CpD, como a não-condicionalidade, a reciprocidade e a ligação com o petróleo. Por isso, a cooperação para o desenvolvimento da China com Angola tornou-se contestável que merece uma análise mais profunda. Esta investigação pretende situar a análise da política chinesa de hoje no pensamentos tradicionais chineses e ideologia comunista, com o objetivo de explicar as particularidades que se apresentam nas suas práticas de CpD. Adicionalmente, visa clarificar as motivações política e económica subjacentes à relação de cooperação sino-angolana. Tendo em consideração o guanxi especial de Macau com a China e com a Angola, bem como a presença de uma organização internacional, o Fórum de Macau, o papel de Macau para a relação de China-Angola também será abordado na análise.
The first contact between China and Angola took place in the 1950s when Angolan people were fighting for their national independence. Over the next half century, China was involved in Angola's anti-colonial and civil wars and established diplomatic relations with Angola in 1983. However, it had little influence in this southern-African country until 2002.The situation changed at the end of the Angolan civil war in 2002. This year, the national reconstruction was put at the top place in Angola’s agenda, and China began to consolidate its presence there through foreign aids. The cooperation attracted global attention, not only because Beijing invested a large amount of money to finance the construction of infrastructure in Angola, but also because China’s aid showed some unique features such as non-conditionality, reciprocity and bonding with petroleum. Therefore, the developmental cooperation between the two nations has become contentious and, hence, deserves further analyses.This research analyses the current Chinese politics from the perspectives of traditional Chinese thoughts and communist ideology, with the purpose of explaining the uniqueness displayed in its practices of aid. In addition, it aims to clarify the political and economic motivations behind the Sino-Angolan cooperation. Considering Macau's special position to China and Angola, especially the presence of an international organization—Macau Forum, its role in the China-Angola relationship is also be analyzed in the study.
The authors offer an analysis of the genesis, evolution, and strategies of three Islamist extremist groups in three parts of Africa: al-Qaeda in the Islamic Maghreb (AQIM) in the borderland of Algeria and Mali; Boko Haram in the borderland of Nigeria, Chad, Niger and Cameroon; and al-Shabaab in Eastern Africa. Through examining the three comparative case studies they argue that the religious agenda of these groups plays the role of a façade only. The most important reasons of the spread of terrorism in all three regions are related to the political and economic conditions, feelings of relative deprivation, low level of trust in government authorities and the frustration of marginalised groups.
The 2008 global food price crisis, and the resurgence of food prices in 2010-2011, caused both widespread concern and expectations. On the one hand, countries whose food supply depends on procuring food from international markets saw food price spikes as threats to their national food security. On the other hand, investors saw in these price spikes an opportunity to make profitable investments in agriculture. Either as threat or opportunity, food price spikes raised interest in Africa, whose lands are fertile and have unrealised potential. Concerns of a possible land acquisitions in Africa, and in particular the impacts of Large-Scale Land-Based Investments in Agriculture (LSLBIA) on local communities, became prominent policy and academic themes. Unfortunately, quantifying the phenomenon has proved hard due to the difficulty of finding empirical evidence. As a result, debates are either theoretical or based on anecdotal evidence. This publication thus explores a different path, and explores the reasons why entities from China and South Africa were interested in investing African agriculture.
This publication examines the reasons why investors were interested in Africa, and the relationship that these bear to The Voluntary Guidelines on the Responsible Governance of Tenure of Land, Fisheries and Forests in the Context of National Food Security (the ‘Voluntary Guidelines’ or ‘VGGT’). The VGGT, endorsed by the UN Committee on World Food Security in May 2012, were created to help countries improve their governance of tenure for the benefit of all, with an emphasis on vulnerable and marginalized people, with the goals of food security and progressive realisation of the right to adequate food, poverty eradication, sustainable livelihoods, social stability, housing security, rural development, environmental protection and sustainable social and economic development.
While primarily aimed at governments, the Voluntary Guidelines also contain important provisions that are applicable to the private sector. They focus on helping investors pursue their projects in ways that recognise and respect legitimate tenure rights and human rights. In addition, the Voluntary Guidelines also contain provisions and encourages good practices for responsible investment in land, forests and fisheries. The Voluntary Guidelines are a valuable tool for helping investors minimise risk while also safeguarding the rights of local communities.
This paper probes on the impact of foreign aid on the amount and quantity of resource exports from the recipient country to the donor state. Looking deeper into the "China in Africa" phenomenon, the article argues that as the amount of foreign aid from China Development Bank to its African recipient states increases, the amount and quantity of oil and mineral resource exports directed back to China also increases. This research posits two things. First, that regional organizations are used by its founding states as a means of influencing the rules of the international game, trying to shift the power balances in their favor and secondly, that while it might not necessarily be the case in the context of China and Africa due to a weak correlation between the tested variables, the direction of the results point to a positive relationship that could be improved should the data include a wider timeframe and more controlled variables. This study also suggests that donor countries proven to be engaging in aid activities for personal interests may not be compelled by the stability of the current economic and political standing of a beneficiary state alone but may also be motivated by its potential market capabilities.
This paper will review the current debates around China’s involvement in and contribution to Africa’s urgently needed energy transition. It tries to provide an answer regarding the ways in which Chinese government actors, investors, financiers, and project developers are shaping the transition pathways in various SSA countries, and helps to identify issue areas that require further investigation.
In-country research tends to underestimate the areas covered by land-based investments in agriculture, whether international or domestic, while media reports tend to overestimate the areas concerned. What is the area of land actually involved in deals concerning land-based investment in agriculture? Figures vary widely in the literature, as do the perspectives on these investments.
The context of these land-based investments differs greatly. There is diversity in farming systems, in tenure rights, and government policies. Especially when investors are seeking land already being used by local communities, land acquisitions may impinge substantially on the legitimate tenure rights of the local communities, their food security and livelihoods. The purpose of these land-based investment deals varies widely because they fulfil a range of interests from food, feed or biofuel production, to collection of forestry products, or the non-productive use of land for financial speculation.
These land-based investments in agriculture involve a complex interlocking global system of interests reflecting different perpspectives. National goverments in both home and host countries play a pivotal role. In host countries, national governments have on the one hand identified the amount and location of land available for investments in agriculture, and promotion agencies have been set up acting as a ‘one-stop-shop’. On the other hand, governments have sought to limit investments by protecting certain areas (e.g., for biodiversity reasons, to protect indigenous peoples, to ensure food security, etc.). The implications of these land-based investments vary widely for people in local communities as there is diversity in local interests (personal or community), wealth, power, status and gender. National government’s decisions concerning the allocation of resources to investors will affect large numbers of people for generations to come. In home countries, national governments have adopted policies that have an impact elsewhere in the world. Thus, national governments in home and host countries have a central role to play to balance the various interests.
Given the likely increase of investments in agriculture in future, it is vital to analyse how the rights and interests are balanced of home and host countries, local communities and investors. Home countries of investors, and nations supporting investments in other nations, must ensure their actions respect and protect human rights and meet environmental standards in the host country according to existing obligations under national and international law, and with due regard to voluntary commitments under applicable regional and international instruments; host countries should have consultations with local communities before any investment takes place that may affect the land and natural resources on which these communities depend for livelihood, social and cultural activities.
How can foreign aid be more effective? The development community has found one such answer in a movement to identify best aid practices, and to monitor, evaluate, and rank the performance of different aid donors along these measures. Although foreign aid donors have committed to implementing these best aid practices, the research on donor performance and rankings show that donors are still not reaching their stated goals. This chapter summarizes the findings in the literature on donor performance and examines the research surrounding the factors that influence donors’ decisions to engage in best aid practices. Questions of donor motivation and the political economy of donor strategies and performance have come under scrutiny for influencing ineffective aid strategies.
Established development organisations face a long-standing legitimacy crisis for not living up to the expectations once set. Meanwhile, thousands of small-scale, voluntary development organisations – referred to as Private Development Initiatives (PDIs) – have joined the field of international development. In this article, I examine the legitimacy of their acts from a local government perspective based on an analysis of four dimensions of legitimacy: regulatory, pragmatic, normative and cognitive legitimacy. The study took place in May 2017 in the Kenyan coastal county of Kwale. A range of government officials were interviewed on how they perceive the interventions of international development organisations in general, and Dutch PDIs in particular, and on their cooperation with these development actors. The study shows that, although many of these PDIs operate in areas that fall under the responsibility of the local government, most of them have a rather limited cooperation with the local government, putting their legitimacy in the eyes of local government officials at stake.
Master's thesis submitted on 29 April 2019 in partial fulfillment of the requirements for the degree of Master of International Affairs (MIA) at the Hertie School of Governance, 2018/2019
El artículo sostiene la hipótesis del cambio en las relaciones entre China y América Latina como parte de la reconfiguración política regional que va de la mano con el reposicionamiento estadounidense en la región. Siguiendo esta premisa, el objetivo del trabajo es poner de relieve alguno aspectos de las relaciones entre China y América Latina en el marco de la reconfiguración política latinoamericana en la segunda década del siglo XXI.
To what extent are decisions regarding Chinese investment in Africa motivated by environmental factors? A considerable body of work has examined the determinants of foreign aid among traditional donors, producing useful debates about the relative significance of recipient need or merit and donor interest. But far less scholarly effort has focused on the motivations of emerging donors and the role of environmental factors in influencing aid allocation. In an attempt to fill these gaps, this article uses statistical techniques to test the hypothesis that China deliberately invests in African countries with poor environmental performance for reasons related to recipient need or donor interest. Drawing upon project-level data regarding investments made by China in Africa from 2002 to 2012, the analysis suggests that Chinese development assistance grows commensurate with a country’s environmental performance, but only to a point. After a state achieves a certain level of environmental quality, Chinese investments decline.
China hoy representa el centro de una histórica transformación del contemporáneo sistema-mundo y la influencia de las dinámicas de su cooperación en la región latinoamericana constituye un elemento importante de análisis en cuanto a la reorientación por parte de este país asiático o de los gobiernos latinoamericanos en la relación de la Cooperación Sur-Sur (CSS). A la luz de esta consideración, el objetivo de este trabajo es reflexionar sobre las nuevas dinámicas de CSS que se desarrollan en el marco de las relaciones entre China y América Latina (AL), sobre todo frente el cambio político que esta región está viviendo en la segunda década del siglo XXI.
After the breakdown of protest at Tiananmen in 1989, China discovered development aid as a tool to overcome international isolation. Due to China's economic growth and its inclusion into international markets through the WTO entry in 2001, aid amounts soared and China has since then become a significant donor, with estimations regarding it as the sixth biggest donor country in the world. In contrast to development aid of the OECD donor nations, China sets no conditions for the granting of development assistance, with the exception of the diplomatic recognition of Taiwan as a part of China ('One-China Policy'). As a promoter of the international norm of non-intervention, authorities in Beijing do not demand structural reform of governance in the recipient's country for the supply of aid. The question of this paper is, whether China is a 'Rogue Donor', undermining democracy and promoting democracy. Does China-by providing alternative funding for developing countries-remove the incentive of democratization accompanying traditional aid by OECD donors? And is Chinese aid-as unconditional non-tax revenue, similar to the existence of natural resources in a country-endowing ruling governments with a means to maintain their power and impair fair party competition? To answer this question, I measure the effect of Chinese aid on development country's democracies by relying on statistical panel data analysis. Including theories of international relations, the paper adds to the understanding of autocratic cooperation and authoritarian norm promotion and by relying on democratization theories, to the understanding of regime type transformations. The empirical analysis reveals that Chinese ODA-like development aid does not influence the transition of recipient countries' regime types.
Chinese firms operating in Africa are often accused of violating international labour standards and not adhering with national labour laws. Considering China’s tendency to maintain control over development projects throughout the entire implementation phase, using Chinese contractors for work performed in the recipient countries, the present paper investigates whether China impacts African labour practices in their capacity as a donor. Specifically, we use a new data material allowing for systematic quantitative analysis of Chinese development finance to investigate whether Chinese development projects affect trade union involvement. Matching geo-referenced data on the subnational allocation of Chinese development projects to Africa over the 2000–2012 period with 41,902 survey respondents across 18 African countries, our estimation strategy relies on comparing the trade union involvement of individuals who live near a site where a Chinese project is being implemented at the time of the interview to those of individuals living near a site where a Chinese project will appear in the future, but where implementation had yet to be initiated at the time of the survey. The results consistently indicate that Chinese development projects – unlike the projects of other major donors – discourage trade union involvement in the local area.
Considering the mounting criticisms concerning Chinese aid practices, the present paper investigates whether Chinese aid projects fuel local-level corruption in Africa. To this end, we geographically match a new geo-referenced dataset on the subnational allocation of Chinese development finance projects to Africa over the 2000–2012 period with 98,449 respondents from four Afrobarometer survey waves across 29 African countries. By comparing the corruption experiences of individuals who live near a site where a Chinese project is being implemented at the time of the interview to those of individuals living close to a site where a Chinese project will be initiated but where implementation had not yet started at the time of the interview, we control for unobservable time-invariant characteristics that may influence the selection of project sites. The empirical results consistently indicate more widespread local corruption around active Chinese project sites. The effect is seemingly not driven by an increase in economic activity, but rather seems to signify that the Chinese presence impacts norms. Moreover, Chinese aid stands out from World Bank aid in this respect. In particular, whereas the results indicate that Chinese aid projects fuel local corruption but have no observable impact on short term local economic activity, they suggest that World Bank aid projects stimulate local economic activity without any consistent evidence of it fuelling local corruption.
While it is often alleged that oil endowment might influence the destination of foreign aid, there is lack of empirical evidence of how and why such an effect may come into play, and even less so of the channels through which it works. This paper aims to bring evidence that contributes to address those points. Specifically, we investigate the role of oil in aid allocation of the G7 donors, over the 1980-2010 period. Results show that, unsurprisingly, aid allocated by these donors increases significantly with oil endowment of recipient countries. Looking more deeply, we interestingly show that their strategic interests in terms of oil security play a role in their provision of aid. More importantly, we find evidence for competition for access to oil supplies among this group of donors.
Foreign aid plays an important role in promoting economic development in Africa. Recently, several countries, most notably China, have emerged as alternative sources of foreign aid. However, their motives for providing foreign aid have been questioned. The present study examines and compares determinants of China's and Japan's foreign aid allocations in Africa. It assumes that the distribution of foreign aid was determined by the aid donors’ self-interest and also by the aid recipients’ needs. Three panel model methods, namely, the pooled OLS method, the one-way fixed effects method and the two-way fixed effects methods, were employed to examine and compare the patterns of China's and Japan's foreign aid allocation in Africa. The main finding was that the provision of foreign aid by China and Japan was primarily driven by the aid donors’ self-interest. Additionally, the size of population in a recipient country was an important element to determine China's and Japan's aid allocations. The findings also suggest that Japan tended to pay more attention to the aid recipient countries’ needs as well as to the quality of governance and institutions in these countries. Overall, the findings indicate that there was no considerable difference in the motives for the provision of aid between the two aid donor countries.
Is the establishment of new Confucius Institutes (CIs) in African countries motivated by resource seeking? We focus on uncovering new empirical evidence about the establishment of CIs, whether they are related to natural resources, and the extent to which the establishment of new CIs and Chinese foreign aid flows affect one another. Whereas Chinese aid flows do indeed appear to be empirically associated with African countries' natural resources, the evidence we report suggests that CIs are established based on a distinct set of motives. We find that CIs, Chinese foreign aid flows to Africa and natural resources have joint predictive power on the subsequent year's Chinese FDI outflows. CIs are not, however, positively associated with the subsequent year's aid flows. And aid flows are not positively associated with the subsequent year's expected number of CIs. We interpret this as evidence that CIs reflect an economically significant expression of Chinese soft power. The goals underlying the expression of this soft power are not subsumed by natural resource seeking and are not easily compressed to a single dimension. The data show that CIs and aid flows are not positive predictors of each other and are not subsumed (i.e., made to disappear) by the inclusion of controls for natural resources. Thus, the presence of a CI reveals independent, novel, and economically significant information about future trade flows that cannot be explained away by differences in resources or other control variables commonly found in empirical models of trade flows. The empirical evidence suggests that CIs are indeed an effective instrument for increasing China's soft power but that this soft power is not motivated solely (if at all) by resource seeking.
This paper tries to clarify Government behaviors how to manage aid in Tanzania. On the contrary to DAC donors’ intentions, the development aid structure, carefully constructed under the poverty reduction regime in Tanzania has actually led to Tanzanian-owned initiatives toward a national development plan (NDP). Furthermore, this paper shows that, in the process of creating an international development aid system, the Tanzanian government has learned to manage aid not only from DAC donors but also from China in a recipient-driven manner. This article is protected by copyright. All rights reserved.
This paper reports on the latest update of the Worldwide Governance Indicators (WGI) research project, covering 212 countries and territories and measuring six dimensions of governance between 1996 and 2006: Voice and Accountability, Political Stability and Absence of Violence, Government Effectiveness, Regulatory Quality, Rule of Law, and Control of Corruption. This latest set of aggregate indicators, are based on hundreds of specific and disaggregated individual variables measuring various dimensions of governance, taken from 33 data sources provided by 30 different organizations. The data reflect the views on governance of public sector, private sector and NGO experts, as well as thousands of citizen and firm survey respondents worldwide. We also explicitly report the margins of error accompanying each country estimate. These reflect the inherent difficulties in measuring governance using any kind of data. We find that even after taking margins of error into account, the WGI permit meaningful cross-country comparisons as well as monitoring progress over time. In less than a decade, a substantial number of countries exhibit statistically significant improvements in at least one dimension of governance, while other countries exhibit deterioration in some dimensions.
We address the strengths and weaknesses of the main available measures of political regime and extend the dichotomous regime
classification first introduced in Alvarez et al. (Stud. Comp. Int. Dev. 31(2):3–36, 1996). This extension focuses on how incumbents are removed from office. We argue that differences across regime measures must
be taken seriously and that they should be evaluated in terms of whether they (1) serve to address important research questions,
(2) can be interpreted meaningfully, and (3) are reproducible. We argue that existing measures of democracy are not interchangeable
and that the choice of measure should be guided by its theoretical and empirical underpinnings. We show that the choice of
regime measure matters by replicating studies published in leading journals.
KeywordsPolitical regimes-Democracy-Dictatorship-Measurement
Some scholars have rushed to judgment about the nature of the relationship between trade and conflict, making strong assumptions about the data upon which their conclusions rest. In this paper, we test these assumptions, showing that they are often not warranted and, thus, pose threats to many of our conclusions about trade’s impact on conflict. We discuss official trade statistics; the treatment of missing trade data; and problems with some decision rules being adopted within our research community. We introduce the new Correlates of War (COW) Trade Data Set; discuss the rationale behind our coding decisions; and compare this data set with other sets. The end result is a series of findings that should help our field advance its understanding of the often difficult issue of trade’s relationship with international conflict.
This article examines Arab aid flows and aid policies, and contrasts them with the broad picture of Western practice. Most Arab bilateral aid is channelled through their ministries of finance and is not open to public scrutiny. While Arab aid has been very generous, it has also been very volatile - due both to the volatility of Arab countries' revenue from their oil and gas exports and to their strategic use of aid to support their foreign policies. Much aid has been used to build and maintain allies in the Arab world and to reward supporters during military conflicts - similarly to Western aid disbursements. Arab donors also support their own commercial interests similarly to Western donors, but favour Islamic countries. Coupled with the large flow of non-official aid into promoting Islam, it seems as though such religious aims are important to Arab donors. Finally, the Arab donors have a long history of policy dialogue with recipient countries that Western countries can learn from if they are in fact interested in building true partnerships with recipient countries.
The authors present estimates of six dimensions of governance covering 199 countries and territories for four time periods: 1996, 1998, 2000, and 2002. These indicators are based on several hundred individual variables measuring perceptions of governance, drawn from 25 separate data sources constructed by 18 different organizations. The authors assign these individual measures of governance to categories capturing key dimensions of governance and use an unobserved components model to construct six aggregate governance indicators in each of the four periods. They present the point estimates of the dimensions of governance as well as the margins of errors for each country for the four periods. The governance indicators reported here are an update and expansion of previous research work on indicators initiated in 1998 (Kaufmann, Kraay, and Zoido-Lobat 1999a,b and 2002). The authors also address various methodological issues, including the interpretation and use of the data given the estimated margins of errors.
This paper analyses the organisational structure as well as the characteristics of development finance provided by Arab donor countries. This is done with a comparative view in relation to western donors and with the aim to develop recommendations as to how Arab development finance can be strengthened and rendered more effective for the new millennium. In the 1960s and 1970s Arab donors established a variety of national and multilateral agencies. These agencies share many characteristics of their western counterparts, but some also exhibit distinctive features. Both in terms of absolute volume as well as generosity measured by aid as a percentage of GDP, Arab countries have been important donors in the past, even though recent years have seen a significant fall in Arab aid. Reversing this downfall in aid, targeting its aid better towards the poor and very poor recipient countries and raising the grant share and the concessionality of loans for these countries together with a reallocation of aid towards the social sectors of human development would render Arab aid-giving more effective in terms of poverty alleviation and more in line with western aid. A greater willingness to participate in the ongoing discussions amongst western donors about the proper objectives and design of development finance would help Arab donorsto achieve the recognition they truly deserve. Closer cooperation with western donors would be a logical consequence of taking such a step. However, this would also need to be matched by a greater willingness on the part of western donors to take their Arab counterparts seriously as partners of development finance. Copyright Blackwell Publishing Ltd 2004.
The volume of foreign aid has increased during the last four decades, albeit with interruptions in certain years. Over time, the major recipients have changed: while the share of aid to Asia has diminished since the 1980s, that destined for sub-Saharan Africa has grown. There is some evidence that, since the late 1990s, debt relief has assumed a larger share of the increased aid flows to sub-Saharan Africa. The share of technical cooperation-a component of aid that is viewed as being driven by donors-has risen. More recently, there has been an increased emphasis on providing budget support to recipient governments, especially in the form of debt relief. Donor harmonization, national ownership of development plans, and sound policies on the part of the recipients are crucial for the aid to be effective in reducing poverty. Copyright © 2006 International Monetary Fund; Journal compilation © 2006 Blackwell Publishing Ltd.
In an extraordinarily influential paper, Craig Burnside and David Dollar (2000, p. 847) find that "... aid has a positive impact on growth in developing countries with good fiscal, mone- tary, and trade policies but has little effect in the presence of poor policies." This finding has enormous policy implications. The Burnside and Dollar (2000, henceforth BD) result pro- vides a role and strategy for foreign aid. If aid stimulates growth only in countries with good policies, this suggests that (1) aid can promote economic growth, and (2) it is crucial that for- eign aid be distributed selectively to countries that have adopted sound policies. International aid agencies, public policy makers, and the press quickly recognized the importance of the BD findings.1 This paper reassesses the links between aid, policy, and growth using more data. The BD data end in 1993. We reconstruct the BD data- base from original sources and thus (1) add additional countries and observations to the BD data set because new information has become available since they conducted their analyses, and (2) extend the data through 1997. Thus, using the BD methodology, we reexamine whether aid influences growth in the presence of good policies. Given our focus on retesting BD, we do not summarize the vast pre-BD literature on aid and growth. We just note that there was a long and inconclusive literature that was hampered by limited data availability, debates about the mechanisms through which aid would affect growth, and disagreements over econometric specification (see Gustav F. Papanek, 1972; Robert Cassen, 1986; Paul Mosley et al., 1987; Peter Boone, 1994, 1996; and Henrik Hansen and Finn Tarp's 2000 review).
Online: www.correlatesofwar.org
China’s provision of development finance to other countries is sizable but reliable information is scarce. We introduce a new open-source methodology for collecting project-level development finance information and create a database of Chinese official finance (OF) to Africa from 2000 to 2011. We find that China’s commitments amounted to approximately US15 billion are comparable to Official Development Assistance following Organization for Economic Cooperation and Development definitions. We provide details on 1,511 projects to fifty African countries. We use this database to extend previous research on aid and conflict, which suffers from omitted-variable bias due to the exclusion of Chinese development finance. Our results show that sudden withdrawals of “traditional” aid no longer induce conflict in the presence of sufficient alternative funding from China. Our findings highlight the importance of gathering more complete data on the development activities of “nontraditional donors” to better understand the link between aid and conflict.
We investigate whether temporary members of the UN Security Council receive favorable treatment from the World Bank, using panel data for 157 countries over the period 1970-2004. Our results indicate a robust positive relationship between temporary UN Security Council membership and the number of World Bank projects a country receives, even after accounting for economic and political factors, as well as regional and country effects. The size of World Bank loans, however, is not affected by UN Security Council membership.
Major DAC donors are widely criticized for weak targeting of aid, selfish aid motives, and insufficient coordination. The emergence of an increasing number of new donors may further complicate the coordination of international aid efforts. At the same time, it is open to question whether new donors (many of which were aid recipients until recently) are more altruistic and provide better targeted aid according to need and merit. Project-level data on aid by new donors, as collected by the AidData initiative, allow for empirical analyses comparing the allocation behavior of new versus old donors. We employ Probit and Tobit models and test for significant differences in the distribution of aid by new and old donors across recipient countries. We find that, on average, new donors care less for recipient need than old donors. New and old donors behave similarly in several respects, however. They disregard merit by not taking the level of corruption in recipient countries into account. Concerns that commercial self-interest distorts the allocation of aid seem to be overblown for both groups.
It is puzzling that India, which has a large domestic constituency of people suffering from underdevelopment, chronic poverty and mal-governance, is emerging as an important aid donor. With the intension of understanding why poor countries provide foreign aid, this article is the first to econometrically analyze India’s aid allocation decisions. First, we utilize cross-sectional data on aid commitments by the Ministry of External Affairs to 125 developing countries, obtained in US dollars from AidData for the 2008-2010 period. Second, we compare India’s aid allocation with that of other donors. Our findings show that India’s aid allocation is partially in line with our expectations of the behavior of a “needy” donor. Commercial and political self-interests dominate India’s aid allocation. We find the importance of political interests to be significantly larger for India than for all donors of the Development Assistance Committee. Moreover, we find that countries which are closer geographically are favored, and that countries at a similar developmental stage are more likely to enter India’s aid program.
The interpretation of the resource-conflict link that has become most publicized—the rebel greed hypothesis—depends on just one of many plausible mechanisms that could underlie a relationship between resource dependence and violence. The author catalogues a large range of rival possible mechanisms, highlights a set of techniques that may be used to identify these mechanisms, and begins to employ these techniques to distinguish between rival accounts of the resource-conflict linkages. The author uses finer natural resource data than has been used in the past, gathering and presenting new data on oil and diamonds production and on oil stocks. The author finds evidence that (1) conflict onset is more responsive to the impacts of past natural resource production than to the potential for future production, supporting a weak states mechanism rather than a rebel greed mechanism; (2) the impact of natural resources on conflict cannot easily be attributed entirely to the weak states mechanism, and in particular, the impact of natural resources is independent of state strength; (3) the link between primary commodities and conflict is driven in part by agricultural dependence rather than by natural resources more narrowly defined, a finding consistent with a “sparse networks” mechanism; (4) natural resources are associated with shorter wars, and natural resource wars are more likely to end with military victory for one side than other wars. This is consistent with evidence that external actors have incentives to work to bring wars to a close when natural resource supplies are threatened. The author finds no evidence that resources are associated with particular difficulties in negotiating ends to conflicts, contrary to arguments that loot-seeking rebels aim to prolong wars.
The widely touted concept of the ‘Beijing Consensus’ (BC) suggests that China's economic success violates conventional theories of development and offers developing countries an alternative vision to the Washington Consensus (WC). Although ambitious, the original conception of the BC is not up to the task of being a worthwhile competitor to the alternative model from which its name was coined, not because of the WC's apparent worthiness, but rather because the BC is a misguided and inaccurate summary of China's actual reform experience. It not only gets the empirical facts wrong about China, it also disregards the similarities and differences China's experience shares with other countries, and it distorts China's place in international politics. In spite of these weaknesses, the BC is nevertheless a useful touchstone to consider the evolution of developmental paradigms, compare China's experience with that of others, identify the most distinctive features of China's experience, and evaluate its significance for the development prospects of other countries and for international relations.
Analysts have long suspected that politics affects the lending patterns of the International Monetary Fund (IMF), but none have adequately specified or systematically tested competing explanations. This paper develops a political explanation of IMF lending and tests it statistically on the developing countries between 1985 and 1994. It finds that political realignment toward the United States, the largest power in the IMF, increases a country's probability of receiving an IMF loan. A country's static political alignment position has no significant impact during this period, suggesting that these processes are best modeled dynamically. An analysis of two subsamples rejects the hypothesis that the IMF has become less politicized since the end of the cold war and suggests that the influence of politics has actually increased since 1990. The behavior of multilateral organizations is still driven by the political interests of their more powerful member states.
Foreign assistance is a fundamental component of the international affairs budget and is viewed by many as an essential instrument of U.S. foreign policy. Since the terrorist attacks of September 11, 2001, foreign aid has increasingly been associated with national security policy. U.S. foreign aid policy has developed around three primary rationales: national security, commercial interests, and humanitarian concerns. These broad rationales are the basis for the myriad objectives of U.S. assistance, including promoting economic growth, reducing poverty, improving governance, expanding access to health care and education, promoting stability in conflictive regions, promoting human rights, strengthening allies, and curbing illicit drug production and trafficking. In FY2010, U.S. foreign assistance totaled 10.38 billion in security-related assistance; 3.64 billion for governance programs; 4.98 in humanitarian assistance. Assistance can take the form of cash transfers, equipment and commodities, infrastructure, or technical assistance, and, in recent decades, is provided almost exclusively on a grant rather than loan basis. Key foreign assistance trends in the past decade include growth in development and humanitarian aid, particularly global health programs, and, in the wake of the September 11, 2001, terrorist attacks, increased security assistance directed toward U.S. allies in the anti-terrorism effort. In FY2010, Afghanistan, Israel, Pakistan, Egypt, and Haiti were the top recipients of U.S. aid, reflecting long-standing aid commitments to Israel and Egypt, the strategic significance of Afghanistan and Pakistan, and emergency earthquake-related assistance to Haiti. Africa is the top recipient region of U.S. aid, at 29%, with the Near East and South and Central Asia each receiving 26%. This is a significant shift from FY2000, when the Near East received 60% of U.S. aid, and reflects significant increases in HIV/AIDS-related programs concentrated in Africa and the expansion of security assistance to Afghanistan and Pakistan. Other notable trends since FY2000 include the increasing role of the Department of Defense in foreign assistance and aid targeted at countries that have demonstrated a commitment to good governance, exemplified by the creation of the Millennium Challenge Corporation. This report provides an overview of the U.S. foreign assistance program by answering frequently asked questions on the subject. It is intended to provide a broad view of foreign assistance over time.
The People's Republic of China's (PRC's) policy
towards Africa in the
1990s has its roots in the crisis surrounding the Tiananmen Square
crackdown on 4 June 1989, and the heavy and persistent criticism by
the developed world levelled against Beijing's human rights record
since that date. Previous to this, the importance of the African
continent to China had become less and less important in the 1980s, as
the Cold War underwent a thawing process and China's modernisation
project demanded foreign investment and technological assistance.
Though Chinese officials paid rhetorical lip service to such issues as
South–South co-operation, the reality of the situation was that Beijing
was mainly interested in maintaining intimate relations with those
countries from which it could benefit economically. In stark contrast to
China's position in the 1960s and 1970s, exhortations and propaganda
grounded in Maoist foundations disappeared, for the ‘socialist
modernisation’ project of Deng Xiaoping demanded economic investment
and a non-conflictual approach to international politics. As a
result, non-ideological relations with the United States, Western
Europe and Japan based on expanding trade links and co-operation
took a priority in China's foreign policy formulation.
China's vastly increased involvement in Africa over the past decade is one of the most significant recent developments in the region. It appears to contradict the idea of international marginalisation of Africa and brings significant economic and political consequences. China's Africa interest is part of a recently more active international strategy based on multipolarity and non-intervention. Increased aid, debt cancellation, and a boom in Chinese-African trade, with a strategic Chinese focus on oil, have proven mutually advantageous for China and African state elites. By offering aid without preconditions, China has presented an attractive alternative to conditional Western aid, and gained valuable diplomatic support to defend its international interests. However, a generally asymmetrical relationship differing little from previous African–Western patterns, alongside support of authoritarian governments at the expense of human rights, make the economic consequences of increased Chinese involvement in Africa mixed at best, while the political consequences are bound to prove deleterious.
China's official aid programme is non-transparent and poorly understood. The paper compares development finance from China and the Organization for Economic Co-operation Development (OECD) generally and through the examination of two cases of Chinese development cooperation in Africa. These cases illustrate a major argument of the paper: that the lion's share of China's officially supported finance is not actually official development assistance (ODA). China does provide finance that meets the definition of ODA, but this is relatively small. Export credits, non-concessional state loans or aid used to foster Chinese investment do not fall into the category of ODA. China's cooperation may be developmental, but it is not primarily based on official development aid. This suggests that the institutions established at the OECD to develop and apply standards for foreign aid (the Development Assistance Committee) may not be the right ones to govern these growing ties. Copyright © 2011 John Wiley & Sons, Ltd.
In this introductory essay to the special issue, we introduce a new dataset of foreign assistance, AidData, that covers more bilateral and multilateral donors and more types of aid than existing datasets while also improving project-level information about the purposes and activities funded by aid. We utilize that data to provide a brief overview of important trends in foreign aid. Contributors to this special issue draw on AidData as well as other sources to analyze aid transparency, “new†donors (not previously described or analyzed), aid allocation, and aid effectiveness. Our recurring theme in this introductory essay is that AidData and these initial academic projects refine rather than revolutionize our understanding of aid. The database has added significant numbers of new projects, dollar amounts, donors, and details about those projects, though there is much more yet to add. We worry that aid debates have been driven by too little information, and that many claims are based on limited or very poor evidence. Rectifying these problems will not be instantaneous: refining knowledge takes a lot of time and hard work. The common feature of the papers in this special issue is their careful attention to nuance and detail. In spite of what some recent authors have claimed, aid is neither a simple solution nor a sufficient cause of most problems in developing countries; its motivations, distribution, and effects are complex, and shifting. Capturing this complexity requires detailed data, careful thought, and sophisticated methods that allow scholars to make conditional causal and descriptive inferences.
This paper explores U.S. influence in the World Bank using panel data on World Bank lending to 148 developing countries between 1984 and 2005. I compare a range of UN alignment variables (with differing interpretations), introduce other measures of U.S. interests, and control for voting alignment with the G7 donors. Estimation results suggest that partial correlations for U.S. UN voting alignment partly reflect vote buying and partly reflect broader alliances. The results convincingly reject the hypothesis that U.S. UN voting alignment merely proxies for G7 influence in the allocation of World Bank funds.
Is China a rogue donor, as some media pundits suggest? Or is China helping the developing world pave a pathway out of poverty, as the Chinese claim? In the last few years, China's aid program has leapt out of the shadows. Media reports about huge aid packages, support for pariah regimes, regiments of Chinese labor, and the ruthless exploitation of workers and natural resources in some of the poorest countries in the world sparked fierce debates. These debates, however, took place with very few hard facts. China's tradition of secrecy about its aid fueled rumors and speculation, making it difficult to gauge the risks and opportunities provided by China's growing embrace. This well-timed book, by one of the world's leading experts, provides the first comprehensive account of China's aid and economic cooperation overseas. Deborah Brautigam tackles the myths and realities, explaining what the Chinese are doing, how they do it, how much aid they give, and how it all fits into their "going global" strategy. Drawing on three decades of experience in China and Africa, and hundreds of interviews in Africa, China, Europe and the US, Brautigam shines new light on a topic of great interest. China has ended poverty for hundreds of millions of its own citizens. Will Chinese engagement benefit Africa? Using hard data and a series of vivid stories ranging across agriculture, industry, natural resources, and governance, Brautigam's fascinating book provides an answer. It is essential reading for anyone concerned with China's rise, and what it might mean for the challenge of ending poverty in Africa.
Traditional aid conditionality has been attacked as ineffective in part because aid agencies – notably the World Bank – often fail to enforce conditions. This pattern undermines the credibility of conditionality, weakening incentives to implement policy reforms. The standard critique attributes this time inconsistency to bureaucratic factors within the aid agency such as pressure to lend, defensive lending, or short-sighted altruism. Pressure from powerful donors provides another potential explanation for lax enforcement. This paper presents an empirical analysis of the political economy of conditionality in international organizations using the case of the World Bank and the United States. The analysis examines panel data on World Bank disbursements to 97 countries receiving structural adjustment loans between 1984 and 2005. Using UN voting as an indicator of alignment with the U.S., the paper presents evidence that World Bank structural adjustment loan disbursements are less dependent on macroeconomic performance in countries aligned with the United States.
The so-called Europe Agreements had been enacted in the 1990s to initiate the integration of goods markets between the 15 EU incumbent economies as of 1995 and 10 potential entrants located in Central and Eastern Europe. This paper evaluates the trade, GDP, and welfare effects of these agreements by means of structural analysis of a bilateral trade flow model. The results support three conclusions. First, the agreements exerted significant positive effects on goods trade between the EU15 incumbents and the CEEC and, at the same time, they induced trade redirection from other countries. Second, EU15 GDP responded by an increase of much less than 1% while that in the 10 CEEC increased by several percent in response to the agreements. Third, the effects on welfare were moderate in the EU15 but amounted to more double-digit percentage changes in the involved CEEC.
We investigate whether temporary members of the United Nations Security Council receive favorable treatment from the International Monetary Fund (IMF) using panel data for 197 countries over the period from 1951 to 2004. Our results indicate a robust positive relationship between temporary Security Council membership and participation in IMF programs, even after accounting for economic, political, and country-specific factors. There is also evidence that Security Council membership reduces the number of conditions included in IMF programs. IMF loans seem to be a mechanism by which the major shareholders of the Fund can win favor with voting members of the Security Council.
We model how the size of a leader's support coalition and government revenues affect trades between policy concessions and aid. We find that aid benefits donor and recipient leaders, while harming the recipient's, but not the donor's, citizenry. The willingness to grant policy concessions for aid depends on how easily leaders can reimburse supporters for their concession. As coalition size increases, incumbents rely more on public goods to reward supporters, making it difficult to compensate for policy concessions. Small-coalition leaders rely more on private goods to retain office, making it easier for them to grant policy concessions for aid. Empirical tests of bilateral aid transfers by Organization for Economic Cooperation and Development (OECD) nations between 1960 and 2001 support the predictions that (1) aid is given by wealthy, large-coalition systems; (2) relatively poor, small-coalition systems are most likely to get aid; but, (3) conditional on receiving aid, the amount increases as the recipient's coalition size, wealth, and policy salience increase. Evidence suggests that OECD members have little humanitarian motivation for aid giving.
This paper explores how U.S. bilateral economic aid has changed over time, focusing on how the recent era-in which the War on Terror has played a prominent role in the Bush administration's aid policy-differs from previous eras. In particular, has the renewed geopolitical role of aid coincided with a reduction of aid to the poorest countries or less weight on need in U.S. aid allocation decisions? We start with an analysis of annual U.S. aid budgets from 1955 to 2006. Controlling for domestic political and economic conditions, we find that the War on Terror's effect on the aid budget is significantly larger than is immediately apparent. To explore how the emphasis on need may have changed over time, we use country-level panel data on aid allocations to 119 countries across the same time period. This shows that U.S. aid flows-for the poorest as well as other developing countries-increased with the War on Terror. However, after rising for 35Â years, the emphasis placed on need has been falling steadily for core aid recipients during the War on Terror.
Through case studies and empirical analysis, scholars have uncovered convincing evidence that individual donors influence lending decisions of international financial institutions (IFIs) such as the World Bank and the Asian Development Bank. Less clear are the mechanisms by which donors exert influence. Potential mechanisms are either formal or informal. Formal influence is through official decisions of the board of executive directors while informal influence covers all other channels. This paper explores the role of informal influence at the Asian Development Bank by examining the flow of funds after loans are approved. Controlling for commitments (loan approvals), are subsequent disbursements linked to the interests of the key shareholders, Japan and the U.S.? I compare these findings with results for the World Bank and consider implications for institutional reforms.
Aid potentially can contribute to democratization in several ways: (1) through technical assistance focusing on electoral processes, the strengthening of legislatures and judiciaries as checks on executive power, and the promotion of civil society organizations, including a free press; (2) through conditionality; and (3) by improving education and increasing per capita incomes, which research shows are conducive to democratization. This study provides a multivariate analysis of the impact of aid on democratization in a large sample of recipient nations over the 1975-2000 period. Using two different democracy indexes and two different measures of aid intensity, no evidence is found that aid promotes democracy. This result is robust to alternative model specifications and estimation techniques, including the use of exogenous instruments for aid. Results are similar if the analysis is confined to the post-Cold War period (1990-2000), despite the reduced dependence of the U.S. and other donors on pro-Western authoritarian regimes among aid recipient nations.
Corruption in the public sector erodes tax compliance and leads to higher tax evasion. Moreover, corrupt public officials abuse their public power to extort bribes from the private agents. In both types of interaction with the public sector, the private agents are bound to face uncertainty with respect to their disposable incomes. To analyse effects of this uncertainty, a stochastic dynamic growth model with the public sector is examined. It is shown that deterministic excessive red tape and corruption deteriorate the growth potential through income redistribution and public sector inefficiencies. Most importantly, it is demonstrated that the increase in corruption via higher uncertainty exerts adverse effects on capital accumulation, thus leading to lower growth rates.
This paper studies the pattern of allocation of foreign aid from various donors to receiving countries. We find considerable evidence that the direction of foreign aid is dictated as much by political and strategic considerations, as by the economic needs and policy performance of the recipients. Colonial past and political alliances are major determinants of foreign aid. At the margin, however, countries that democratize receive more aid, ceteris paribus. While foreign aid flows respond to political variables, foreign direct investments are more sensitive to economic incentives, particularly "good policies" and protection of property rights in the receiving countries. We also uncover significant differences in the behavior of different donors. Copyright 2000 by Kluwer Academic Publishers
Critics of foreign aid programs argue that these funds often support corrupt governments and inefficient bureaucracies. Supporters argue that foreign aid can be used to reward good governments. This paper documents that there is no evidence that less corrupt governments receive more foreign aid. On the contrary, according to some measures of corruption, more corrupt governments receive more aid. Also, we could not find any evidence that an increase in foreign aid reduces corruption. In summary, the answer to the question posed in the title is 'no.'
The effect of foreign aid on regime type in recipient countries remains widely debated. In this research note, I argue that a recent focus on moral hazard has distracted attention from another mechanism linking foreign aid to domestic political institutions. During the Cold War, donors geopolitical objectives diminished the credibility of threats to condition aid on the adoption of democratic reforms. The demise of the Soviet Union and the end of the Cold War, on the other hand, enhanced the effectiveness of Western aid conditionality. I reanalyze an important recent study and demonstrate that the small positive effect of foreign aid on democracy in sub-Saharan African countries between 1975 and 1997 is limited to the post Cold War period. This new empirical evidence underscores the importance of geopolitical context in conditioning the causal impact of development assistance, and the evidence confirms that the end of the Cold War marked a watershed in the politics of foreign aid in Africa.I would like to thank Henry Brady, Jennifer Bussell, Ruth Berins Collier, David Collier, Robert Powell, Jason Seawright, Beth Simmons, Laura Stoker, and two anonymous reviewers for their comments. I am also grateful to Arthur Goldsmith for sharing his data. Any errors are my own.
Communist Aid to Non-Communist Less Developed Countries, CIA Intelligence Handbook
CIA, 1980, Communist Aid to Non-Communist Less Developed Countries, CIA Intelligence
Handbook, available at: http://www.foia.cia.gov/ (accessed October 2010).
Communist Aid to Less Developed Countries of the Free World
CIA, 1981-1984, Communist Aid to Less Developed Countries of the Free World, CIA
Intelligence Handbook, available at: http://www.foia.cia.gov/ (accessed October
2010).
Untangling China's Quest for Oil through State-Backed Financial Deals, The Brookings Institution Policy Brief #154
- Peter C Evans
- Erica S Downs
Evans, Peter C. and Erica S. Downs, 2006, Untangling China's Quest for Oil through State-Backed Financial Deals, The Brookings Institution Policy Brief #154.
Chinese Assistance to Africa: Characterization and Position Regarding the Global Governance of Development Aid
- Émmanuel Guérin
Guérin, Émmanuel, 2008, Chinese Assistance to Africa: Characterization and Position
Regarding the Global Governance of Development Aid, Global Governance, 3.
The Beijing Consensus: How China's Authoritarian Model Will Dominate the Twenty-First Century
- S Halper
Halper, S. (2010) The Beijing Consensus: How China's Authoritarian Model Will
Dominate the Twenty-First Century. New York, NY: Basic Books
Codebook for Assembling Data on China's Development Finance
- D Hawkins
- D Nielson
- A Bergevin
- A Hearn
- B Perry
Hawkins, D., D. Nielson, A. Bergevin, A. Hearn, and B. Perry (2010) Codebook for
Assembling Data on China's Development Finance, accessed from
www.aiddata.org/research/china (accessed September 2010)
China-Africa Relations Moving into an Era of Rapid Development
- Wenping He
He, Wenping, 2006, China-Africa Relations Moving into an Era of Rapid Development,
Inside Asia 3-4, Oct/Dec: 2-6.
Penn World Table Version 6.3, Center for International Comparisons of Production, Income and Prices at the University of Pennsylvania
- Lan Heston
- Robert Summers
- Bettina Aten
Heston, lan, Robert Summers and Bettina Aten, 2009, Penn World Table Version 6.3, Center
for International Comparisons of Production, Income and Prices at the University of
Pennsylvania.
Africa and the G8 -or why Bob Geldof Needs to Wake up
- Lindsey Hilsum
Hilsum, Lindsey, 2006, China, Africa and the G8 -or why Bob Geldof Needs to Wake up, in:
Wild, Leni and Mepham, David, Editors, The New Sinosphere: China in Africa,
Published by IPPR.
The effect of political regimes on inequality
- S Hsu
Hsu, S. (2008) "The effect of political regimes on inequality, 1963-2002," UTIP working
paper no. 53, University of Texas
Aid and Corruption: Do Donors Use Development Assistance to Provide the
- Alessia Isopi
- Fabrizio Mattesini
Isopi, Alessia and Fabrizio Mattesini, 2010, Aid and Corruption: Do Donors Use
Development Assistance to Provide the "Right" Incentives? Paper presented at the
AidData Conference, University College, Oxford, March 22-25.
The Impact of China on Subsaharan Africa
- Raphael Kaplinsky
- Dorothy Mccormick
- Mike Morris
Kaplinsky, Raphael, Dorothy McCormick and Mike Morris, 2007, The Impact of China on
Subsaharan Africa, IDS Working Paper n° 291.