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China in Africa: competition for traditional development finance institutions?


Humphrey, Christopher; Michaelowa, Katharina (2019). China in Africa: competition for traditional development finance institutions? World Development, 120:15-28.

Abstract

Official development finance from China has risen tremendously in the past two decades across the globe, including in the world’s poorest continent Africa. How has this sudden increase in development resources affected the two major multilateral development banks (MDBs) in the region, the World Bank and the African Development Bank (AfDB)? One might expect that the MDBs would compete with China to maintain influence in Africa. This study uses statistical tests and interviews with government officials in three recipient countries to see if this is the case. The results indicate that total MDB finance by country change little over time in response to Chinese activity. The sectoral allocation of concessional lending to the poorer countries does not show any responsiveness either. In contrast, shifts in levels and sector allocation can be observed for non-concessional countries. Overall, the study suggests that while China’s role in African development finance is indeed substantial and growing, it has not had the “game changing” impact on traditional development finance as popular perception might lead one to believe. This may change, however, once more recipient countries develop economically and move to non-concessional lending.

Abstract

Official development finance from China has risen tremendously in the past two decades across the globe, including in the world’s poorest continent Africa. How has this sudden increase in development resources affected the two major multilateral development banks (MDBs) in the region, the World Bank and the African Development Bank (AfDB)? One might expect that the MDBs would compete with China to maintain influence in Africa. This study uses statistical tests and interviews with government officials in three recipient countries to see if this is the case. The results indicate that total MDB finance by country change little over time in response to Chinese activity. The sectoral allocation of concessional lending to the poorer countries does not show any responsiveness either. In contrast, shifts in levels and sector allocation can be observed for non-concessional countries. Overall, the study suggests that while China’s role in African development finance is indeed substantial and growing, it has not had the “game changing” impact on traditional development finance as popular perception might lead one to believe. This may change, however, once more recipient countries develop economically and move to non-concessional lending.

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Additional indexing

Item Type:Journal Article, refereed, original work
Communities & Collections:06 Faculty of Arts > Institute of Political Science
Dewey Decimal Classification:320 Political science
Scopus Subject Areas:Social Sciences & Humanities > Geography, Planning and Development
Social Sciences & Humanities > Development
Social Sciences & Humanities > Sociology and Political Science
Social Sciences & Humanities > Economics and Econometrics
Uncontrolled Keywords:Geography, Planning and Development, Economics and Econometrics, Development, Sociology and Political Science China, World Bank, African Development Bank, Africa, Aid, Infrastructure
Language:English
Date:August 2019
Deposited On:10 Apr 2019 07:40
Last Modified:29 Jul 2020 10:35
Publisher:Elsevier
ISSN:0305-750X
OA Status:Closed
Publisher DOI:https://doi.org/10.1016/j.worlddev.2019.03.014

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