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Assessing Structural Transformation and the Potential Impacts of Belt and Road Initiative Projects in Africa

Author

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  • Weiping Li

    (City University of Macau)

  • Saite Lu

    (Emmanuel College)

Abstract

Infrastructure development, central to the Belt and Road Initiative (BRI), is crucial for facilitating structural transformation. However, numerous critics contend that the Initiative serves as a tool for China to engage in debt-trap diplomacy, which fails to deliver actual development in Africa. Therefore, assessing whether BRI projects will facilitate the necessary structural transformation in these countries requires meticulous analysis. Given the extended project cycle typical of infrastructure development, evaluating the overall socioeconomic impacts of the BRI is challenging. Nonetheless, these projects are likely to be implemented as part of the expansion of China's existing model for overseas infrastructure projects. This model is characterized by a reliance on concessional loans and credit facilities for financing, and state-owned enterprises as contractors. Contrary to the debt-trap diplomacy narrative, our findings, based on panel data and staggered difference-in-differences analysis, indicate that Chinese projects have positively impacted multiple aspects of Africa's structural transformation process.

Suggested Citation

  • Weiping Li & Saite Lu, 2024. "Assessing Structural Transformation and the Potential Impacts of Belt and Road Initiative Projects in Africa," The European Journal of Development Research, Palgrave Macmillan;European Association of Development Research and Training Institutes (EADI), vol. 36(3), pages 548-570, June.
    • Handle: RePEc:pal:eurjdr:v:36:y:2024:i:3:d:10.1057_s41287-024-00624-1
    DOI: 10.1057/s41287-024-00624-1
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