No full-text available
To read the full-text of this research,
you can request a copy directly from the author.
China and Japan in Pursuit of Infrastructure Investment Leadership in Asia: Competition or Convergence?
Abstract
Powerful states often use tools of economic statecraft, such as foreign aid and other
financial policy instruments, in a bid to “purchase” influence as well as establish
regional leadership among their neighbors. How and why do these states undertake
similar economic statecraft strategies and policies? The article examines the evolution
of infrastructure financing policy of China and Japan and identifies the ever changing
and, yet at the same time, mirroring interaction between the two countries’ development
finance practices. We argue that emulation and competition have led to the
process of policy diffusion between these two countries. The competition between
these two foreign aid leaders in East Asia especially after China’s Belt and Road Initiative
has shaped the region’s infrastructure development dynamics as they strive
to move the equilibrium outcome to their advantage. Such equilibrium through the
policy diffusion process has important implications on global development governance.
... This article focuses on Central Asia and the Caucasus for several reasons. First and foremost, the literature on Western-led and Chinese development finance has extensively covered other regions of the world including Latin America (Br€ autigam & Gallagher, 2014), Africa (Br€ autigam & Gallagher, 2014;Dreher et al., 2018) and Southeast Asia (Camba, 2021;Katada & Liao, 2020;Liao, 2019). The post-Soviet space in general, and Central Asia and the Caucasus in particular, have so far remained undiscovered territory in the literature on development finance despite the growing attention paid by Western MDBs as well as the intensification of the Chinese role in these regions. ...
... Chin (2012, p. 215) argues that through a 'two-way socialization' China no longer only internalizes the norms of the WB, but also 'shapes the norms, rules, and principles of international institutions'. Similarly, Katada & Liao (2020) find that a 'development norm convergence' is under way, as China learned from and emulated Japan's development policy norms and practices, while Japan responded by transforming its own infrastructure lending in Asia. It has been argued that AIIB, in particular, is taking a hybrid layered approach in pursuit of innovation and a more transformative agenda to generate positive developmental spillovers (Vazquez & Chin, 2019). ...
... Although Western and Chinese development finance practices have affected many regions of the world, they have not done so evenly. Some parts of the world have spawned more ambitious projects of development finance than others (allowing for interactions involving multilayered governance), and their levels of success or failure have varied considerably (Br€ autigam & Gallagher, 2014;Katada & Liao, 2020;Liao, 2019). Much valuable research on the institutional landscape of MDBs' financing stresses how, beyond cooperation with the recipient countries' national governments, Western MDBs have built coalitions across opposition and civil society organizations ( € Oge, 2017). ...
The energy resources of Central Asia and the Caucasus have drawn significant scholarly attention due to their geopolitical importance and role in regional economic development. Western multilateral development banks (MDBs), such as the World Bank and the EBRD, have been the leading actors shaping norms and practices for lending to the energy sectors of these regions. China has also recently emerged as the top investor in hydrocarbons and renewables in Central Asia, at the same time increasing its presence in the Caucasus. How have Western MDBs and China shaped each other’s lending practices? By exploring the what and the how of development finance in the energy sectors of Central Asia and the Caucasus, this study argues that a dual transformation is under way. The World Bank and the EBRD are now working closely with key local stakeholders in the recipient states to make energy reforms more successful. China, on the other hand, is now cooperating more closely with Western MDBs, and accepting and implementing some of their market principles and environmental targets. The article demonstrates that the West vs. China dichotomy based on neoliberalism vs. state-capitalism is blurred and the post-Soviet energy sector includes features of both models.
... Over the course of their respective development histories, all three governments were active in promoting industrial 'national champions' and helping them expand overseas through various policy instruments. In effect, China's current policy in both export credits and foreign aid resembles that of Japan and South Korea in the past (Katada and Liao, 2020;Stallings and Kim 2017). Like today's China, Japan during the 1970-1980s also bore criticism for over-subsidizing exports (Maull, 1991). ...
... In the 2000s, the three governments deployed free trade agreements as a primary statecraft tool. Since the 2010s, their focus has shifted towards overseas infrastructure financing (Katada and Liao, 2020). Competitive statecraft among Beijing, Tokyo, and Seoul intensified against the backdrop of China's rising political and economic global and regional influence as Japan and South Korea sought ways to blunt Chinese power projection (Chung, 2010;Yoshimatsu, 2017). ...
This article examines the origin, process, and outcome of an understudied, but important multilateral climate change negotiation: the OECD negotiation to restrict export finance for coal‐fired power projects. It assesses how the United States – the OECD’s most powerful member – led the negotiations, and how Japan, South Korea, and China – a non‐OECD state – affected the negotiation’s outcome. It shows how internal and external dynamics of the negotiation under the shadow of China’s rising market influence shaped the preferences of Japan and South Korea in such a way that constrained US attempts to build new rules in curbing coal export finance. This research illustrates the collective action problem in an increasingly fragmented global governance landscape driven by transitions in global power. Contrary to critics that have identified China’s participation in multilateral organizations as weakening the global liberal order, this research shows that a ‘club‐based’ approach to this liberal order proved ineffective absent China’s participation.
... As early as the 1970s, Japan was a leading infrastructure financier for developing Asia, a result from its infrastructure-oriented foreign aid and export finance strategy to promote both Japan's domestic economy and foreign relations. Under a strong Japanese influence, China in the 1990s also adopted a similar foreign aid and export finance strategy to support its economic and political interests abroad (Katada & Liao, 2020). At the turn of twenty-first century, competition between the two countries intensified as China's policy outreach began to eclipse Japan's presence in East Asia and beyond. ...
... As a result, while China rose rapidly as the region's new infrastructure financier, accountability issues often plagued Chinese backed-projects (Lee, 2017;Liao, 2019). Ironically, competitive pressure has led to convergence between China's and Japan's infrastructure lending programmes, which are drifting away from the global best practices in foreign aid and export credits (Katada & Liao, 2020). Particularly, both governments began developing similar financial arrangements to attract host countries and allow them greater financial leverage or better terms for their infrastructure plans (Jiang, 2019;Kratz & Pavlićević, 2019). ...
China and Japan have engaged in fierce competition over infrastructure lending in East Asia, particularly since the 2010s. Under the intense focus on the geopolitical roots of this competition, the political-economic effects of this competitive statecraft on the smaller Asian countries are less discussed. At first glance, lending competition seems to benefit borrowing countries through access to more financial resources. This paper argues, however, that competitive statecraft leads to an ‘easy money’ conundrum where overeager creditor countries, in pursuit of geostrategic goals, perpetuate political opportunism in borrowing countries. To support this claim, we examine China–Japan competition over two high-speed rail projects in Indonesia and Malaysia. Our process tracing analysis explains how push factors (easy money from China and Japan) and pull factors (the host government’s desire to exploit easy money for political gain) interacted to advance two troubled projects at the cost of borrowing countries’ fiscal discipline and government accountability.
... Japan's extensive technological infrastructure, high demand for complex goods, and lucrative manufacturing industry make it an attractive target for foreign direct investment (FDI). The correlation between development financing practices and mutual adherence to commercial financing practices, government involvement, capital concentration, and respect for host country management rules strengthens the collaboration between China and Japan in the field of foreign investment (Jiang, 2019;Katada & Liao, 2020). The complex interaction between cultural and economic elements clarifies the subtle motivations behind foreign direct investment (FDI) and emphasizes the importance of fully understanding these dynamics to develop effective policies at both the company and state levels. ...
This study seeks to develop a comprehensive and practical toolkit for evaluating the factors influencing Chinese foreign direct investment (FDI) in the Japanese economy. The study focuses on sustaining global economic growth by efficiently allocating resources, promoting foreign investment, and maintaining stable international trade. The study utilizes empirical data, sociological insights, and regression analysis to establish and validate the impact of business and national determinants on Chinese foreign direct investment (FDI) in Japan. A sociological survey conducted among managers of 10 Japanese branches of a Chinese transnational corporation investigates a range of investment-related criteria, including capital and ownership structure, financial stability, language competency, gender balance, intellectual property portfolios, and other relevant aspects. The analysis examines the external factors that substantially impact the entrance of foreign capital by incorporating government statistics, international consultant reports, and key economic indicators from both China and Japan. This study serves as a fundamental basis for governmental policies seeking to promote investments and formulate strategies within multinational corporations, notwithstanding the disruptive effects of the COVID-19 pandemic on global economic stability and foreign direct investment flows. This research supports the knowledge economy paradigm by highlighting the significance of intellectual capital, technological transfer, and innovative methods in influencing international investment dynamics.
... The proportion of Japan's economic infrastructure assistance increased significantly during the second Abe administration, as planned (December 2012-September 2020) (Fig. 10). Therefore, Japan's economic infrastructure aid during this period was not "back in roots" (Katada and Liao 2020), "resurgent" (Sasada 2019), or "contagious" (Jiang 2019), but expanded. ...
The power struggle between China and Japan in Asia continues, with their political confrontations extending to foreign aid rivalry. While Japan used to dominate in foreign aid in the region, China has overtaken it with its infrastructure assistance. No formal regional aid and development framework has yet been developed here. However, this article argues that unintentional donor coordination between China and Japan has been realized. The aid provided by the two does not overlap as each country tends to focus on a limited number of recipients, and a natural division of labor originates. Why has their rivalry resulted in aid coordination? This article answers the question by examining the behaviors of Japanese and Chinese aid and finding that, ironically, it is their shared interest in economic infrastructure aid that creates such a situation.
... Alternatives proposed by China that impose lower standards provide more attractive and cheaper options. With the emergence of the AIIB and the BRI making the market more competitive, major IFIs might no longer insist on strict standards (Katada and Liao, 2020). Given that the BRI and the AIIB are considered China's grand economic initiatives that complement each other, the emergence of both initiatives may have brought even more negative impacts on other IFIs' environmental safeguard standards. ...
The Belt and Road Initiative (BRI) and the Asian Infrastructure Investment Bank (AIIB) have raised concerns among critics about their potential negative impact on global environmental governance. These China-led initiatives may lower the environmental and social safeguard standards of their infrastructure investments abroad to outcompete other international financial institutions (IFIs) like the Asian Development Bank (ADB) and the World Bank. This could trigger a race to the bottom in the global infrastructure investment market. The study found that while the BRI may have a significant influence on the norms and standards of development finance, the AIIB has only had limited impact. The market has become more concentrated rather than intensified competition. The ADB's standards have not been affected, but the World Bank may have been negatively impacted and reduced its project-level environmental safeguards. The negative impact extends beyond BRI countries to other countries. The most concerning finding relates to the substantial global investments in coal power projects under the BRI. To improve global sustainability, China and developed countries must collaborate to provide cleaner and more affordable infrastructure investment to developing countries.
... Are there aspects other than competition at play between the two largest East Asian economies in their respective strategies in Myanmar? The core argument is that, despite the competing strategic interests over Southeast Asia which have emerged in the last decade with the launch of large-scale geopolitical strategies (e.g. the PRC's Belt and Road Initiative and Japan's Partnership for Quality Infrastructure) (Gong, 2018;Katada & Liao, 2020;Kudo, 2009;Lam, 2016;Strefford, 2005), Chinese and Japanese initiatives have actually been characterized by a certain degree of implicit coordination. Following Yang (2019), it will be argued that, since the beginning of Myanmar's socioeconomic reforms under former president Thein Sein, Japan and the PRC, in their respective geoeconomics strategies in Myanmar, have acted as "competitive partners", challenging the Washington consensus' orthodoxy regarding tied financing and the imposition of strict political conditionalities on the local government, thus establishing a new pattern of aid financing (Yang, 2019). ...
Japan's "Last Hope": Myanmar as an arena for Sino-Japanese competition, coordination and global standardization Despite competing strategical interests over Southeast Asia that have emerged in the last decade, with the launch of wide scope geopolitical strategies Chinese and Japanese initiatives have been characterized by a certain degree of implicit coordination, particularly in offering support to the Myanmar state's territorializing strategies for economic development. The case of the Thilawa Special Economic Zones (SEZ) is exemplary, as it was a Japan-led project which became a model and benchmark example for similar development initiatives supported by the People's Republic of China.
... Such policy reorientation led to more concrete branding efforts in the 2000s for increased visibility, with the placement of the Japanese flag or official logos made mandatory for any item/building/ material funded by Japan's ODA (MOFA, 2006). Further, aid visibility has become increasingly salient for Japan in pursuit of national interests (Yamamoto, 2021;Yennie Lindgren, 2021)particularly in Southeast Asia, where aid is becoming instrumental in the country's competition with China's SSDC (Aoki, 2018;Katada & Liao, 2020). ...
In contrast to expectations that the greater visibility of aid increases the donor's prestige, this paper examines why certain donor countries may seek to render their aid programs invisible. As the case of Japan's early Triangular Development Cooperation (TDC) in Southeast Asia demonstrates, donors at times seek to conceal their presence to better secure their national interests. By approaching this (in-)visibility puzzle through the focus on its politics, this study highlights the complexity of donors' motivations in selectively activating (in-)visibility in TDC. Via a historicised account of Japan's postwar aid/economic cooperation relationship with Southeast Asia, the paper finds how the triangular mechanism allowed Japan and Thailand as an intermediary to selectively render their presence in-/visible to shun hostile sentiments against them in order to pursue their respective diplomatic goals.
... Wang, 2017). It remains to be seen whether China's financial statecraft will lead to a 'race to the top' that improves the quality of development governance or a 'race to the bottom' undermining the living standards of local communities and the quality of infrastructure investment (Katada & Liao, 2020). ...
Since 2013, the Belt and Road Initiative has become China’s signature foreign economic policy campaign. While there have been debates on the initiative’s implementation and implications, an emerging consensus suggests that the export of capital-intensive infrastructure is a key driving factor of China’s financial statecraft. For Southeast Asian countries, such Chinese efforts are useful in plugging their domestic infrastructure gaps, not least in the remote parts of their territory. Against this backdrop, this article examines arguably two of the most prominent Chinese infrastructure projects in Malaysia – the East Coast Rail Link (ECRL) and the Malaysia-China Kuantan Industrial Park (MCKIP). It posits three inter-related arguments. Firstly, unlike conventional analyses which commonly treat the Chinese state as a singular, unitary actor, both the central and provincial governments in China’s multi-layer state structure have played important roles and demonstrated different characteristics in Chinese infrastructure overture towards Malaysia. Secondly, one observes contrasting patterns of well-coordinated state-business relations in the ECRL project versus loose, decentralised state-business relations driven largely by Guangxi province and market forces for the MCKIP. Thirdly, the implementation of both the ECRL and the MCKIP has been heavily constrained by the political-institutional environment of Malaysia as the host country, illustrating that Chinese financial statecraft, in the form of infrastructure provision, generates considerably less impact than what popular rhetoric suggests.
The Belt and Road Initiative (BRI) has been one of the primary vehicles through which China exports its infrastructure and developmental standards. China’s expanding ambitions to become an international standard-setter compelled a Japanese response. Shinzo Abe’s government has initiated strategies such as the Partnership for Quality Infrastructure. This paper juxtaposes the Chinese and Japanese approaches to securing their position in the global governance of infrastructure finance, with a particular focus on the high-speed railway industry. It posits that economic statecraft has diffused from Japan to China and then back to Japan. In emulating Chinese economic statecraft, Japan has increased state involvement in infrastructure project exports and centralized authority within the Prime Minister’s Office. The permeation of such statecraft and the apparent escalation of Sino-Japanese competition bear significant consequences for regional trade and developmental cooperation regimes. This heightened competition may initially afford South and Southeast Asian nations a broader choice of service and infrastructure providers. In the long run, if the competition solidifies, secondary states might find themselves compelled to integrate into either China’s hub-and-spoke model or Japan’s reinvigorated production networks. Moreover, such integration could render secondary states dependent on the technology and finance supplied by regional great powers. However, the eventual structure of the region will likely depend on how these two major powers navigate their rivalry. As South and Southeast Asian states and corporations become entwined in both states’ geopolitical and geoeconomic networks, we cannot rule out the evolution of a latticework of intersecting relationships.
Background Development aid to Pacific Islands states tends to take the form of grants to provide services in health, education and transport, however Melanesian states are largely rural, and it may be time to consider stronger support for the agricultural sector as a mode of development to provide for future food security, decreased reliance on imports, and improved nutrition in an era of climate change adaptation. Methods To understand the place of family farming in the donor development strategies of four Melanesian states we first assess the place of foreign aid in total development finance to Papua New Guinea (PNG), Solomon Islands, Vanuatu and Fiji between 2008–2021. Using data from the Lowy Institute a detailed study of aid flows highlights the respective place of official development assistance (ODA), other financial flows, private flows and remittances in the financial flows for each recipient state. We then focus on donor aid flows and their sectoral breakdown concentrating on the ‘Agriculture, Forestry and Fisheries’ (AFF) sector, and within AFF on the sub-sectors of donor intervention. Results We demonstrate the main areas of interest for each donor, paying particular attention to aid to agriculture, specifically who gives it, and why. Conclusions We conclude by noting that the orientation of agricultural aid to Melanesian states is outward and directed toward producing niche products for the global economy, and not inward or directed towards supporting the development of a stronger agricultural sector, nor the resilience of local population through food security. We thus argue that donor development aid to the agricultural sectors of these four Melanesian states is more reflective of ‘retroliberalism’ than of genuine concern for Pacific Islands food security.
Australia has historically been a prominent diplomatic partner for the Pacific Island countries, providing development assistance to support their social and economic progress. China gradually heightened its political and economic influence in the Pacific area by integrating the region into its Belt and Road Initiative. This development has encouraged scholars to examine Australia's diplomatic engagements in the Pacific region in response to China's growing presence. This article approaches this issue by using the concept of economic statecraft as an analytical tool. It argues that Australia's reactions to China's presence through the infusion of strategic motivations into foreign aid and the use of multilateral agreements and initiatives can be seen as positive economic statecraft with two characterizations: emulation of China's successful strategies and differentiation from Chinese approaches through the incorporation of multilateral and ideational methods.
As clean energy policy becomes a pressing need in the wake of the looming climate crisis, the world—especially developing Asia—has witnessed a conflicting trend throughout the 2010s, that is, the boom of coal-fired power development. This article argues that the geoeconomic significance, driven by not only China’s but also Japan and South Korea’s pursuit of national interests, intensified a competition among them in supporting overseas coal fired power financing and has contributed to this phenomenon. Using a mix of qualitative and quantitative data, it illustrates that while coal power financing becomes a conduit for these three ‘developmental states’ to forge comprehensive relations with countries they deem strategically important, the effectiveness of using this conduit is contingent, and constrained by exogenous factors, particularly dynamics of global energy markets.
My chapter in this edited book explains the historical engagements between Mongolia and China. In the pre-Cold War era, Mongolia was dominated by the erstwhile Soviet Union. In the post-Cold War era, however, China dominates Mongolia while the contested political space is divided between pro-Russian and pro-Chinese legislators in the Mongolian parliament. Both China and Russia seem to have a tacit understanding of providing a security umbrella and economic cover to Mongolia. However, the rise of China has intensified the debate about the China "China Threat" in the Mongolian policy circle and issues such as its geopolitical implications, sovereignty and security concerns are dominating the debate. In this context, the chapter tries to critically assess the transport and connectivity aspects of BRI, and CMREC, in particular, the Tianjin-Ulaanbaatar-UlanUde Central Route, its current status, geopolitical dimensions, ecological concerns and other issues related with it.
Since the 2010s, infrastructure investment has emerged as a critical field for Japan’s foreign policy and international relations. This article examines major characteristics of the development of Japan’s external engagement in infrastructure investment from a socio-cultural perspective. It argues that key political figures played a pivotal role in paving the way for Japan’s policy shift in infrastructure investment based on social relationality to engage in interactions to build trustworthy relationships. The article also contends that the Japanese government adopted confrontational and accommodating policy options towards China, which reflected inclusivity and complementation in the zhongyong dialectics. Moreover, Japan’s policy developments indicate that the logic of relationality, which is sustained by socio-cultural practices in East Asian societies, could explain crucial characteristics of diplomatic policies and relations among East Asian countries.
This essay examines the relationship between critical minerals and resource security and then considers Australia’s current strategy toward the critical minerals sector as well as its emerging international strategy.
How does international cooperation erode? Recent work has probed the demise of international institutions, but we know little about the process by which cooperation unravels. We develop a novel account of how cooperation falters in informal club regimes. We use it to explain the current unraveling of the international Arrangement on publicly backed export finance, which until recently had successfully tamed price competition between member countries for several decades. We show that the emergence of China as a major export credit power operating outside the regime helped catalyze this shift, but the story is more complicated. While initial defectors from the regime were those most exposed to Chinese export competition, subsequent defectors increasingly responded not just to China but also to the primary defectors. Thus, the key driver of unraveling cooperation in the regime is not the emergence of an external competitor per se, but the competitive pressures this shock unleashes within the agreement. By shifting attention from state-level rationales for (non)compliance to system-level competitive dynamics, our analysis has important implications for theoretical understanding of how international regimes erode.
How do states pursue industrial policies in the context of China’s rise? Examining Indonesia and Malaysia’s mineral processing sectors, we argue that these countries illustrate two different pathways that states take to bolster their industrial policies. Indonesia has followed the leading sector strategy to increase domestic nickel processing capacity and decrease reliance on resource exports. Chinese firms and the Indonesian government built the Indonesia Morowali Industrial Park to house nickel smelters, fostering a new leading sector. Chinese capital in smelting follows what Albert Hirschman has called ‘intermediate investments’, maximising forward and backward linkages across the Indonesian economy. In contrast, Malaysia has followed the dual economy strategy, where semi-finished goods are imported and assembled into finished ones to be exported abroad. Chinese firms and the Malaysian government established the Malaysia–China Kuantan Industrial Park to import, process and export steel products. However, due to the dual economy strategy, the industrial park impairs the activities of domestic steelmaking companies and inhibits the potential build-up of smelting capacity. In sum, through an examination of an industrial park in each country, our paper connects the literatures on industrial policy and Chinese capital.
Since 2016, the Asian Infrastructure and Investment Bank (AIIB) has assisted countries in improving their economic conditions with infrastructure and transport projects. Publicly proposed in 2013 by China's President, Xi Jinping, during his state visit to Indonesia, the AIIB has helped consolidate China's legitimacy as a leading power in Asia and globally. Thus, this paper argues that forming the AIIB was a move to counter the relatively low vote share in the neoliberal's international financial institutions, namely the World Bank, the International Monetary Fund (IMF), and the Japan-led Asian Development Bank (ADB). With the added benefit of leading a development institution, more legitimacy is gained via the international system. Since its establishment, AIIB had significantly increased from 57 founding members in 2016 to 103 in 2020. In examining how this translates into China gaining legitimacy from the international system, this paper examined the case of China's AIIB through the Third Level of Analysis in Kenneth Waltz's Neorealism. In his The State, And War, Waltz argued for the "Levels of Analysis" and convinced the third level analyses a state's legitimacy and goals via the international system's responses and interactions. This paper examined the relationship between China's standing in the eyes of the world and the acceptance of AIIB as a legitimate development institution.
The rise of China and the introduction of the Belt and Road Initiative have intensified regional great power competition. Seemingly, China and Japan have been competing over the export of infrastructure projects and access to the Southeast Asian market. Against this backdrop, this paper sheds light on recipient states’ agency. Specifically, this paper explores how Indonesia has responded to Sino-Japanese competition through the perspective of economic hedging. In the realm of domestic railway development and the need to establish connectivity on Java, why did the Indonesian government decide to work with China to develop the Jakarta-Bandung High-speed Rail project and Japan on the North Java Upgrading Line, as the two lines are not interoperable? Railway policy in Indonesia is strategic and pragmatic. On the one hand, Sino-Japanese competition diversifies Indonesia’s options as it continues striving to strengthen infrastructure development. On the other hand, the need continually to strike a balance between the two great powers requires skill and flexibility. Therefore, maintaining policy autonomy and accepting economic costs make-up secondary states’ responses to great power competition in turbulent times.
This article examines Japan’s (1980s-90s) and China’s (2000s-10s) overseas infrastructure promotion campaigns. We explain how developmentalism, i.e. the state’s active engagement in economic development, has given rise to these two go-global campaigns, as the governments of both countries sought to expand industrial policy outward to compensate for domestic political economic problems. We explain how Japan, the go-global forerunner, influenced China, the go-global latecomer, and how China has formulated its own campaign strategies based on its distinct institutional and ideational settings as well as lessons derived from Japan’s past policy practices.
In the new millennium, Japan found a renewed interest in infrastructure investment and engaged in this policy issue with diplomatic initiatives and external partnerships with due attention to China’s geo-economic presence. In formulating strategies for infrastructure investment, Japan has presented and disseminated a specific idea of ‘quality infrastructure’ as a principal component of its external infrastructure push. This article seeks to trace the evolution of Japan’s ideational principles for quality infrastructure and elucidate policy motivation, policy objective, and external influence. It argues that Japan’s advocacy of quality infrastructure derived from domestic impetus to expand infrastructure exports and external impetus to compete against China’s infrastructural push through the Belt and Road Initiative (BRI). Japan advocated quality infrastructure as a strategic tool to pursue multiple policy objectives that shifted from justifying Japanese infrastructural push to using as means to check and accommodate the BRI, and to legitimising common governance principles for infrastructure investment. In relations to external influence, Japan’s persistence in norm-setting encouraged China to incorporate normative principles first at business dialogues and then embed common governance principles in its policy approach to infrastructure investment.
How is the rise of China affecting international governance? This paper examines the domain of infrastructure finance by focusing on China’s two policy banks, which are the main creditors of China’s overseas infrastructure projects. While the incumbent international credit regimes led by the Organisation for Economic Co-operation and Development (OECD) distinguish development-oriented aid from commercially oriented export credits, emerging late-developed economies blur this dichotomy by largely funding development projects with state-backed export credits. The way China alters the OECD’s credit governance, this paper argues, demonstrates both the generality of late development and the peculiarity of “Chinese” development. Rather than directly subsidizing firms’ international business with the state’s fiscal revenue, policy banks financialized host country’s state-owned and state-coordinated assets using various market instruments. By doing so, they gave Chinese firms a comparative advantage in the markets of less developed regions, allowing them to undertake projects that firms from advanced industrial countries cannot. This financing mechanism has reshaped the international development regime by transforming the dominant means of credit allocation from state-led aid-giving to market-based exchange, and rewritten the liberal rules of the international export credit regime by financing the developing world in a both statist and liberalist manner. As a result, China has built a paralleled regime in regions insufficiently covered by the existing financial schemes of incumbent credit regimes.
Motivation
Advanced industrial economies that used to advocate and implement charitable foreign assistance have started to (re)adopt mercantilist development finance by using official development finance credits to support private firms. This seems to be in response to the mercantilist practice of emerging Southern development partners.
Purpose
This article compares mercantilist practice by Northern and Southern development partners by examining how and why the public financial agencies of China and Japan offer state‐backed credits to businesses in different ways.
Approach and methods
The practices of China's two national policy banks—China Development Bank (CDB) and Export‐Import Bank of China (Chexim), were compared to those of Japan's two public financial agencies—Japan International Cooperation Agency (JICA) and Japan Bank for International Cooperation (JBIC).
Quantitative data was obtained from published primary sources, including official histories, annual reports and financial statements of the agencies as well as public financial almanacs and policy documents. In the absence of official data, open‐source secondary data collected by research institutes and agencies was used.
Between 2016 and 2019, the author conducted 59 interviews in China and 15 in Japan with officials of the financial agencies, their clients, other stakeholders and researchers.
Findings
Chinese firms rely largely on public financial agencies to win international contracts. Japanese firms borrow from public financial agencies primarily for overseas investment projects, which may also attract private finance.
Policy implications
China's rise has triggered Japan as well as other older industrial economies to respond by (re)adopting mercantilist development finance policies to encourage commercial investors to engage in development co‐operation. However, the looser relations between state and firms in older industrial economies such as Japan makes it harder to encourage private firms to follow state strategies and invest in underdeveloped regions.
This paper seeks to demystify and characterize China’s official development finance by examining lending mechanisms of China’s two policy banks—China Development Bank and Export-Import Bank of China. Using quantitative and qualitative data, the paper shows how and why policy banks implement a peculiar means of development finance, i.e., funding projects in developing countries with relatively high-interest rate loans, differing from low-interest rate development-finance credits from industrial countries. The paper argues that China’s official development finance is not only about practicing economic statecraft or facilitating export-led growth; it is also the internationalization of a development-finance model that has facilitated its own development in the past decades. In this model, the state does not play a direct role in allocating fiscal revenue; rather, it plays an indirect role in enhancing creditworthiness of projects and making them financially viable. The “state-supported, market-based” Chinese credits reshape development finance and offer an alternative option for the developing world.
One of the main focuses of the Abe administration’s foreign policy is overseas infrastructure development assistance. Evidence suggests that Japan has returned to its traditional approach to foreign aid, the “Japan model,” after an interval of a few decades. This article analyzes the international and domestic contexts behind the recent changes in Japan’s aid policy.
The existing liberal international economic order was constructed during the era of American hegemony and has been heavily shaped by US power. How is the rise of China affecting global economic governance? This article analyzes the case of export credit, which has long been considered a highly effective international regulatory regime and an important component of global trade governance. I show that the rise of China is profoundly altering the landscape of export credit and undermining its governance arrangements. State‐backed export credit is a key tool of China's development strategy, yet I argue that an explosion in China's use of export credit is eroding the efficacy of existing international rules intended to prevent a competitive spiral of state subsidization via export credit. The case of export credit highlights a fundamental tension between liberal institutions of global governance and the development objectives of emerging powers.
We discuss the recent literature on policy diffusion and put forward a new articulation of its political dimensions. Policy diffusion means that policies in one unit (country, state, city, etc.) are influenced by the policies of other units. The diffusion literature conceptualises these interdependencies with four mechanisms: learning, competition, coercion, and emulation. This article identifies a model of diffusion that is dominant in the diffusion literature. According to this model policies spread because decision makers evaluate the policy implications of the actions of other units. We argue that the role of politics remains in the background in this model, and we show how going beyond a narrow focus on policy adoptions helps us to consider the politics of policy diffusion more explicitly.
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.
The prevalent view in the economics literature is that a high level of infrastructure investment is a precursor to economic growth. China is especially held up as a model to emulate. Based on the largest dataset of its kind, this paper punctures the twin myths that (i) infrastructure creates economic value, and that (ii) China has a distinct advantage in its delivery. Far from being an engine of economic growth, the typical infrastructure investment fails to deliver a positive risk-adjusted return. Moreover, China’s track record in delivering infrastructure is no better than that of rich democracies. Investing in unproductive projects results initially in a boom, as long as construction is ongoing, followed by a bust, when forecasted benefits fail to materialize and projects therefore become a drag on the economy. Where investments are debt-financed, overinvesting in unproductive projects results in the build-up of debt, monetary expansion, instability in financial markets, and economic fragility, exactly as we see in China today. We conclude that poorly managed infrastructure investments are a main explanation of surfacing economic and financial problems in China. We predict that, unless China shifts to a lower level of higher-quality infrastructure investments, the country is headed for an infrastructure-led national financial and economic crisis, which is likely also to be a crisis for the international economy. China’s infrastructure investment model is not one to follow for other countries but one to avoid.
As China is entering into the center stage of the world arena, it has become more proactive in regional and global institution-building. Globally, it has been actively involved in the G20 affairs and will be hosting the 2016 G20 Summit in Hangzhou. Regionally, it came up with a major initiative for a new institution, namely, the Asian Infrastructure Investment Bank (AIIB). This article aims to analyze the new institution's formation, goals and institutional arrangements as well as its implications.
This study examines the forces that facilitated the surge of national industrial policy programs in China after 2004. We trace the formative role of transnational exchanges with Japan for Chinese policy conceptions. Rivaling political and administrative actors filtered out those conceptions that could serve as either transitional or defensive policy recipes for pursuing their bureaucratic interests. During the 1990s, a core group of industrial policy advocats, through a series of large-scale research projects and program drafting efforts, became a driving force at the center of a broader policy coalition. While this coalition was overlooked or underrated in Western research, its statist agenda came to dominate the peak bodies of policy-making under the Hu-Wen administration.
Whereas many studies of Chinese economic administration focus on "plan vs. market" or "state vs. private sector"controversies, we suggest that four major advocacy coalitions are
discernible in the contested arena of economic governance and state guidance.
This article traces the evolution of China's policies aimed at promoting corporate social responsibility and sustainable investments, while assessing the extent to which its regulatory regime has succeeded in influencing the investment strategies of Chinese national companies across
the developing world, specifically in Africa and the Mekong region. In an attempt to improve its international reputation, the Chinese government has stepped up its initiatives in recent years to oversee the practices of Chinese companies abroad and reorient the country's policies towards
greater corporate responsibility. But while promising, these efforts have been largely impeded by weak policy implementation. As evinced from the African mining sector and the Mekong's hydropower industry, the diversity of corporate actors and their relative autonomy in making investment decisions,
combined with lax governance in host countries and a long-standing concern with national development, have worked to hinder the effective regulation of Chinese overseas investments. Yet, that China, as a new country of origin of FDI, and Chinese firms are now making commitments to corporate
social responsibility (CSR) and sustainability remains significant, indicating an important development in the country's “Going Global” strategy.
In this paper we suggest that 2011–2012 may mark a paradigm shift in dominant constructions of ‘foreign aid’ and a substantive shift of power within the architecture of global development governance. We evaluate critically the emergence and central principles of the ‘aid effectiveness paradigm’ over the last 10–15 years, and the various internal and external pressures that have mounted around it. We then discuss the Fourth High Level Forum on Aid Effectiveness, a global conference which was held in Busan, South Korea in 2011, which we suggest can be seen as a pivot point in the emergence of a new ‘development effectiveness’ paradigm. Among other things, this elevates the role of the private sector and re‐centres economic growth and enhanced productivity to the core of mainstream ‘development’ thinking. At the same time, the emerging aid architecture aims to enrol more fully the ‘(re‐)emerging’ donors and development partners, and is likely to involve more differentiated commitments to global aid targets and renegotiated ‘norms’. This paper provides a commentary on the debates, omissions and achievements of the Busan High Level Forum, with the wider aim of providing critical insights into the current state of flux around foreign aid norms, institutions and governance.
The Great Recession, Euro contagion, Middle East upheavals, nuclear proliferation, and expansion of rights, among others, highlight the centrality of diffusion to international studies. This Presidential Address outlines building blocks for a shared conceptualization of diffusion that is attentive to the initial stimulus; the medium through which information about the stimuli may/may not travel to other destinations; the political agents un/affected by the stimulus' positive or negative externalities, who aid or block the stimulus' journey to other destinations; and outcomes that enable discrimination among grades of diffusion and resulting equilibria. Various issue areas illustrate how initial stimuli may/may not change preferences, transform identities, trigger emotions, alter strategic choices, and affect outcomes. I advance three related considerations. First, to avoid selection bias, understanding what does not diffuse (the "Vegas counterfactual") should be as central as what does. Concepts such as firewatts and sedimentation are essential for gauging a medium's relative immunity/vulnerability to diffusion. Second, weaving domestic, regional, and global considerations into a single analytical framework reduces omitted variable bias and enables systematic cross-regional comparisons. Third, these building blocks imbue the study of diffusion with political dynamics—entailing strategic interaction, contingency, incomplete information, and unintended effects—that defy determinism, automaticity, or teleology. Similar causal mechanisms may yield different outcomes under different domestic, regional, and global conditions. And different mechanisms may yield similar outcomes under comparable circumstances. I highlight the challenges inherent in assessing the outcomes of diffusion given competing empirical findings, epistemologies, and normative readings of what does/does not and should/should not diffuse, and outline an agenda for future research.
This article explores the impact of economic globalization on workers' rights in developing countries. The authors hypothesize that the impact of globalization on labor rights depends not only on the overall level of economic openness but also on the precise ways in which a country participates in global production networks. Using a new data set on collective labor rights, the authors test these expectations. Their analysis of the correlates of labor rights in 90 developing nations, from 1986 to 2002, highlights globalization's mixed impact on labor rights. As “climb to the top” accounts suggest, foreign direct investment inflows are positively and significantly related to the rights of workers. But at the same time, trade competition generates downward “race to the bottom” pressures on collective labor rights. The authors also find that domestic institutions and labor rights in neighboring countries are important correlates of workers' rights.
Most diffusion models make the implausible assumption that diffusion is unstructured by relationships within the population of interest. This article proposes methods for incorporating a priori notions about social structure into analysis. Diffusion is modeled within an event history framework where the individual's rate of adoption is a function of prior adoptions by related actors. Two diffusion models are suggested: an epidemic model where adoption rates vary with the number of prior adoptions, and a salience model where adoption rates vary with time since the last event. This approach is illustrated in an examination of the decolonization of British and French colonies. Diffusion is shown to occur within regions rather than within empires or the world system as a whole.
This paper employs a world society theoretical framework to examine the recent trend among foreign aid donors to focus on
security sector reform as an aid priority. Through a comparative qualitative case study based on interview data collected
from aid officials and development workers in Canada, Sweden, and the United States (n = 41) in 2006–2007, this paper finds that the extent to which the security sector reform agenda is integrated into donor
policy and programs is mediated by catalytic policy processes linked to intergovernmental organizations and the degree of
donor agency autonomy from the rest of government. These findings are used to illustrate how common processes of globalization
in world society shape similar approaches to foreign aid among donor agencies despite disparate domestic contexts. These processes
lead to convergence of donor policy around security issues and at the same time can account for decoupling of practice from
world society policy models.
KeywordsSecurity sector reform–Donor agencies–Development assistance–Globalization–World society theory–Decoupling
Social scientists have sketched four distinct theories to explain a phenomenon that appears to have ramped up in recent years, the diffusion of policies across countries. Constructivists trace policy norms to expert epistemic communities and international organizations, who define economic progress and human rights. Coercion theorists point to powerful nation-states, and international financial institutions, that threaten sanctions or promise aid in return for fiscal conservatism, free trade, etc. Competition theorists argue that countries compete to attract investment and to sell exports by lowering the cost of doing business, reducing constraints on investment, or reducing tariff barriers in the hope of reciprocity. Learning theorists suggest that countries learn from their own experiences and, as well, from the policy experiments of their peers. We review the large body of research from sociologists and political scientists, as well as the growing body of work from economists and psychologists, pointing to the diverse mechanisms that are theorized and to promising avenues for distinguishing among causal mechanisms. Government Sociology Version of Record
While major arenas of Sino-Japanese struggle are maritime security affairs and political leadership in managing regional affairs, infrastructure development is emerging as a new source of rivalry. Given this new trend, this article highlights rivalry in the provision of regional institutions and programs to sustain infrastructure development and the winning of the Jakarta–Bandung high-speed railway project in Indonesia. It argues that in committing to infrastructure development, China and Japan were required to pay due attention to close connections with existing multilateral development banks and responses to the needs of a target government. Moreover, it contends that both states regarded commitments to infrastructure development as crucial vehicles to enhance political leverage and means to sustain the national economy and diffuse specific ideals for development.
In Chinese Economic Statecraft, William J. Norris introduces an innovative theory that pinpoints how states employ economic tools of national power to pursue their strategic objectives. Norris shows what Chinese economic statecraft is, how it works, and why it is more or less effective. Norris provides an accessible tool kit to help us better understand important economic developments in the People’s Republic of China. He links domestic Chinese political economy with the international ramifications of China’s economic power as a tool for realizing China’s strategic foreign policy interests. He presents a novel approach to studying economic statecraft that calls attention to the central challenge of how the state is (or is not) able to control and direct the behavior of economic actors. Norris identifies key causes of Chinese state control through tightly structured, substate and crossnational comparisons of business-government relations. These cases range across three important arenas of China’s grand strategy that prominently feature a strategic role for economics: China’s efforts to secure access to vital raw materials located abroad, Mainland relations toward Taiwan, and China’s sovereign wealth funds. Norris spent more than two years conducting field research in China and Taiwan during which he interviewed current and former government officials, academics, bankers, journalists, advisors, lawyers, and businesspeople. The ideas in this book are applicable beyond China and help us to understand how states exercise international economic power in the twenty-first century.
Japan has long been regarded by mainstream International Relations theories as a status quo power intent on pursuing an immobilist
international strategy towards China characterized by hedging rather than any move to active balancing. The article argues
that the conditions that are thought to encourage hedging behaviour—the predictability of other states’ intentions, the malleability
of intentions through engagement, domestic preferences that obviate balancing, and a favourable offence–defence balance—are
now deteriorating in the case of Japan’s strategy towards China. The consequence is that evidence is mounting of Japan’s shift
towards active ‘soft’ and incipient ‘hard’ balancing of China through a policy of active ‘encirclement’ of China diplomatically,
the build-up of Japanese national military capabilities aimed to counter China’s access denial and power projection, and the
strengthening of the US–Japan alliance. This shift has become particularly evident since the 2010 trawler incident, and the
return to power in 2012 of Prime Minister Abe Shinzō. The consequences of Japan’s shifting strategy are not yet clear. Japan
may be moving towards a form of ‘Resentful Realism’ that does not add new equilibrium to regional security but is actually
more destabilizing and poses risks for China and the USA, especially as Japan’s own security intentions become more opaque.
These conclusions, in turn, invite a reconsideration of the comfortable theoretical consensus on Japan as an eternal status
quo power.
This paper investigates whether World Bank conditionality is affected by the presence of “new” donors by using panel data for 54 African countries over the 1980 to 2013 period.
Empirical results indicate that the World Bank delivers loans with significantly fewer conditions to recipient countries which are assisted by China. Less stringent conditionality is also observed in better off borrowers that are in addition funded by Kuwait and the United Arab Emirates, but this effect vanishes after the start of the new millennium. In contrast, World Bank conditionality
is rarely affected by aid inflows from DAC donors, and when it is, conditionality is revised upwards. These findings suggest that new donors might be perceived as an attractive financial option to which the World Bank reacts by offering credits less restrictively in order to remain competitive in the loan-giving market.
Beijing's Asian Infrastructure Investment Bank appears to be a “game changer” in the political economy of East Asia. In an era when the US superpower and Japan are facing fiscal problems, China has ample funds to woo Asian states seeking economic development. Notwithstanding its maritime disputes in the South China Sea with some ASEAN states, Beijing has offered the carrot of development as a means to serve its geopolitical ends.
The article examines China's emergence over the past decade as a net donor, and the implications of this status in global development. The analysis begins by outlining China's rise as a net donor, drawing comparisons in two-way aid flows with the other rising states, specifically Brazil, South Africa and India, and then turns to the implications of China's rise as an aid sender. The central argument is that conceptualizing China's rise as a ‘net donor’ is crucial for understanding the hybrid position that China has come to occupy in the global aid system, and the consequences of this positioning. Although China has achieved remarkable success with its own development, rather than join the Organization for Economic Cooperation and Development's Development Assistance Committee (DAC) regime of traditional donors, the Chinese Communist Party and government leadership has chosen instead to continue to self-identify with the countries of the South, and to construct ties of South–South cooperation outside of DAC arrangements. The Chinese leadership is trying to stake out an unprecedented position in the global aid system, traversing the North–South divide, despite the fact that China has already joined the ranks of world economic powers.
This article highlights the parallels between Japan’s leveraging of foreign aid to secure access to strategic natural resources in the post-World War II period, and China’s similar use of foreign aid since the early 1990s. It then shows how both countries have applied similar strategies in their aid programs in Myanmar, and points out how dramatic shifts in Myanmar’s domestic politics have shaped their opportunities for economic engagement. China seized upon Myanmar’s political transition in 1988 to expand its aid program, while Japan has responded to Myanmar’s reform measures since 2010 by resuming its aid efforts. The article concludes by considering the potential for China–Japan cooperation through their aid programs in Myanmar.
In November 2004 a Chinese nuclear submarine cruised into Japan's territorial waters near the Okinawa Islands. In response, the Japanese government dispatched several Japanese naval ships and planes to chase the Chinese submarine until it navigated into international waters. This event, which potentially could have become the first exchange of fire between Japan and China since the Second World War, illuminated increasingly problematic security relations between the two neighbouring countries in the twenty-first century. In fact, deterioration of Sino-Japanese security relations is not a recent phenomenon but has already been evident since the mid-1990s, when Japan imposed a series of economic sanctions on China. Between 1995 and 2000 Japan had suspended its foreign aid to China in protest against: China's nuclear weapons tests; China's large scale war game including the launch of missiles across the Taiwan Strait; and Chinese naval activities in disputed areas in the East China Sea. This article looks at Sino-Japanese security relations since the mid-1990s through three case studies of the aid sanctions imposed by Japan on China. It clarifies the domestic political and bureaucratic interests that motivated aid sanctions and determined the decision-making process leading to these sanctions. The article argues, that with certain politico-security interests, Japanese governments actively used foreign aid as a strategic instrument to counter provocative military actions by China in the East Asian region since the mid-1990s. Despite the limited influence that Japanese aid sanctions have actually had on Chinese military behaviour, Japan's strategic use of foreign aid has undeniably created a new dynamism in security relations between the two neighbouring great powers in Asia.
Foreign aid is a complex international institution which, over the years, has experienced a number of transformations. Most of these changes, however, cannot be understood outside the ideological environment in which they were engendered. Building on this analytical insight, the article argues that the debate on development assistance has always been framed in terms of an opposition between forces of the Right and forces of the Left. The first part of the article explains how the very definition of aid has been influenced by the Right-Left opposition. The second section uses the Right-Left distinction to re-examine the key stages in the history of the aid regime. The third part summarises the assessment that the Right and the Left each make of a half-century of development assistance. Finally, the conclusion discusses the significance of this contribution to the study of aid and international relations.
The Japanese government has suspended part of its foreign aid to China twice in the past 12 years: first in 1989 after the Tiananmen Square incident, and secondly in response to China's nuclear testing in 1995. These two foreign aid suspension cases illustrate that the Japanese government has established extension and suspension of its foreign aid as a multiple-use foreign policy tool, as the country became the top aid donor in the world in the 1990s.The cases also indicate the importance of Japanese domestic politics and its public opinion in supporting the government's unilateral foreign policy actions, as foreign aid becomes an important policy tool aiming to enhance the security environment for Japan. Both of these conclusions go beyond the conventional theoretical understanding of Japan's foreign policy-making, which has emphasized Japan as a reactive state with single-minded pursuit of its economic interests.
During the eighties, industrialized countries increasingly used tied aid to circumvent international agreements restricting export subsidies for capital goods. The 1991 Helsinki Disciplines restricted the use of tied aid as a tool of export promotion. In export subsidy competition, donor states have a collective interest in avoiding spiraling escalation of spending; but, reaching international agreements is difficult when preferences over levels of expenditure vary between them. States that favor greater restraint on export subsidies can make subsidy competition prohibitively expensive by increasing their expenditures. However, this requires them to threaten substantial increases in spending when they have a demonstrated preference against doing so. Successful cooperation can only occur when governments with sufficient budgetary resources prefer subsidy reduction, but can mobilize domestic constituencies to make subsidy retaliation credible. Despite an apparent decline in international influence, the U.S. was able to compel accession to the Helsinki agreement by threatening substantial increases in its spending. This article uses a process-tracing approach to demonstrate the role of domestic politics in making that threat credible.
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.
Why did Japan propose the creation of the Asian Monetary Fund (AMF) that intentionally excluded the United States from membership in the middle of the Asian financial crisis? I argue that the immediate cause of Japan's AMF proposal lies in Japan's interest in defending the Asian model of economic development against the U.S.-led IMF bailout operation in Thailand. The exclusion of the United States was the key in realizing such an interest. Following an identity approach to international relations, I will demonstrate how Japan's Ministry of Finance (MOF) officials' conception of Japan and the United States as the two rivals promoting different models of economic development (i.e., Japan's state-led vs the U.S. market-based economic development) contributed to the making of Japan's AMF proposal. In doing so, I theoretically develop an identity–intention analytical framework designed to establish causation between an identity and a policy choice that emerge from a social, interactive structure. The framework offers a better way of dealing with the overdetermination of given interests as well as the underspecification of the kinds of interests at stake to which rational theorizing of international relations is often vulnerable.
Rising economies including China, the United Arab Emirates, Brazil, Korea, India, Kuwait and Saudi Arabia are subtly changing the rules of foreign aid with profound consequences for the role of multilateral institutions and conditionality. Fears abound that this new aid is bolstering rogue states, fuelling corruption, and increasing the debt burdens of poor countries. This article critically assesses these arguments before dissecting the attractions of emerging donors' aid against a background of established donors' failure to deliver on promises to increase aid, reduce conditionality, better coordinate and align aid efforts, and reform the aid architecture. It argues that a silent revolution is taking place whereby the emerging donors are not overtly attempting to overturn the rules of multilateral development assistance, nor to replace them. Rather, by quietly offering alternatives to aid-receiving countries, they are weakening the bargaining position of western donors. The resulting tensions underscore the urgency of reforming the multilateral aid system.
The advance of economic globalization has led many academics, policy-makers, and activists to warn that it leads to a 'race to the bottom'. In a world increasingly free of restrictions on trade and capital flows, developing nations that cut public services are risking detrimental effects to the populace. Conventional wisdom suggests that it is the poorer members of these societies who stand to lose the most from these pressures on welfare protections, but this new study argues for a more complex conceptualization of the subject. Nita Rudra demonstrates how and why domestic institutions in developing nations have historically ignored the social needs of the poor; globalization neither takes away nor advances what never existed in the first place. It has been the lower- and upper-middle classes who have benefited the most from welfare systems and, consequently, it is they who are most vulnerable to globalization’s race to the bottom.
Questions about Chinese aid—how large it is and how fast it is growing; how decisions are made on how much aid is provided each year; which countries receive it and how much they get; how the aid is managed within the Chinese government and how it is evaluated are explored. The Chinese are clearly set to play a major role in aid-giving worldwide, and the aid-giving governments of Europe, North American and Japan should expand lines of communication and, to the extent possible, collaboration with the Chinese. [CGD Essay].
Objective. This study assesses the effect of interstate competition on the stringency with which states enforce environmental regulations.
Method. Pooled cross-sectional time-series analysis of state surface-mining regulation is used to determine if the enforcement gap between a state and competitor states affects the stringency of state enforcement.
Results. The results suggest that state enforcement is systematically affected by the behavior of regional competitors. States adjust their enforcement in response to competitor states when their enforcement stringency exceeds that of their competitors. When competitors' enforcement is more stringent, however, their behavior does not have a significant effect.
Conclusion. This study provides empirical evidence for a race to the bottom in state environmental regulation.
Multilateral Development Banking for This Century's Development Challenges: Five Recommendations to Shareholders of the Old and New Multilateral Development Banks
- Montek Ahluwalia
- Lawrence Singh
- Andres Summers
- Nancy Velasco Branes
- Scott Birdsall
- Morris
Ahluwalia, Montek Singh, Lawrence Summers, Andres Velasco Branes, Nancy Birdsall,
and Scott Morris. Multilateral Development Banking for This Century's Development
Challenges: Five Recommendations to Shareholders of the Old and New Multilateral
Development Banks (Washington, DC: Center for Global Development, 2016).
Chugoku Shudo Nihon jirenma: Ajia Infura toshigin
- Asahi Shimbun
Asahi Shimbun, "Chugoku Shudo Nihon jirenma: Ajia Infura toshigin," March 21, 2015.
Buying Power: The Political Economy of Japan's Foreign Aid
- David Arase
Arase, David. Buying Power: The Political Economy of Japan's Foreign Aid (Denver: Lynne
Rienner, 1995).
News Release: ADB, AIIB Sign MOU to Strengthen Cooperation for Sustainable Growth
- Asian Development Bank
Asian Development Bank. "News Release: ADB, AIIB Sign MOU to Strengthen Cooperation for Sustainable Growth." 2 May 2016. https://www.adb.org/news/adb-aiib-sign
-mou-strengthen-cooperation-sustainable-growth.
Competition and Cooperation in the Export Credit Regime' . Paper presented at the annual meeting of American political science
- Jonas Bunte
- Geoffrey Gertz
- Alexandra O Zeitz
Bunte, Jonas, B., Geoffrey Gertz, and Alexandra O. Zeitz. 'Competition and Cooperation
in the Export Credit Regime'. Paper presented at the annual meeting of American
political science, Boston, MA, 31 August 2018.
China's New Development Bank Is a Wake-up Call for Washington
- Bhaskar Chakravorti
Chakravorti, Bhaskar. "China's New Development Bank Is a Wake-up Call for Washington." Harvard Business Review, 20 April 2015. https://hbr.org/2015/04/chinas-new
-development-bank-is-a-wake-up-call-for-washington.
Power Shift: Shifting G20 International Public Finance from Coal to Renewables
- Han Chen
- Jake Schmidt
Chen, Han, and Jake Schmidt. Power Shift: Shifting G20 International Public Finance from
Coal to Renewables (New York: Natural Resources Defense Council, 2017).
China's Belt and Road Initiative Is Falling Short
China's Belt and Road Initiative Is Falling Short." The Financial Times, 29 July 2017.
https://www.ft.com/content/47d63fec-9185-11e8-b639-7680cedcc421.
Nihon Kigyo no Kokusai ka to Shakai Infra jigyo
- Yasuhiro Ezaki
Ezaki, Yasuhiro. "Nihon Kigyo no Kokusai ka to Shakai Infra jigyo" [Globalization of
Japanese Companies and Social Infrastructure Projects].
Ajia Shikou Koku Infura Bisinesu to Nihon Kigyo No Gurobaru Risuku Manajimento Taisei
- Yasuhiro Ezaki
Ezaki, Yasuhiro. "Ajia Shikou Koku Infura Bisinesu to Nihon Kigyo No Gurobaru Risuku
Manajimento Taisei" [Infrastructure Building Business in Asia's Emerging Economies and the System of Japanese Firms' Global Risk Management].
Normative Framing of Development Cooperation: Japanese Bilateral Aid between the DAC and Southern Donors
- Sakiko Fukuda-Parr
- Hiroaki Shiga
Fukuda-Parr, Sakiko, and Hiroaki Shiga. Normative Framing of Development Cooperation: Japanese Bilateral Aid between the DAC and Southern Donors. Working Paper
No. 130 (Tokyo: JICA Research Institute, 2016).
- Walter Hatch
- Kozo Yamamura
Hatch, Walter, and Kozo Yamamura. Asia in Japan's Embrace: Building a Regional Production Alliance (London: Cambridge University Press, 1996).