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Evidences on Donors Competition in Africa: Traditional Donors versus China

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  • Eric Gabin Kilama

Abstract

This paper describes the aid allocation behaviours of the Development Assistance Committee (DAC) donors and their response to the emergence of China in the aid landscape. Our analysis presents evidences of donors' competition in Africa. We investigate whether African countries with the Chinese influence expanding receive favourable aid modalities from G7 donors over the period 2000–2011. We find a robust positive relationship between the level of aid and the number of China projects a country receives and the level of bilateral aid from G7 donors, even after accounting for standard economic and political factors. Results indicate that DAC donors use bilateral aid to tackle the increasing influence of China in Africa, by delivering more aid to countries with natural resources or strategic political interest. The paper also assesses empirically whether strategic interests and economic competition between DAC donors and China have influenced the composition of aid flows received by African countries. Our empirical strategy is sharpened by the use of a spatial‐X model and a difference‐in‐difference estimation that leverages a ‘natural’ experiment in DAC aid flows in the aftermath of the financial crisis, with China increasing his sphere of influence in Africa. Copyright © 2015 John Wiley & Sons, Ltd.

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  • Eric Gabin Kilama, 2016. "Evidences on Donors Competition in Africa: Traditional Donors versus China," Journal of International Development, John Wiley & Sons, Ltd., vol. 28(4), pages 528-551, May.
    • Handle: RePEc:wly:jintdv:v:28:y:2016:i:4:p:528-551
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    Cited by:

    1. Dreher, Axel & Fuchs, Andreas & Hodler, Roland & Parks, Bradley C. & Raschky, Paul A. & Tierney, Michael J., 2019. "African leaders and the geography of China's foreign assistance," Journal of Development Economics, Elsevier, vol. 140(C), pages 44-71.
    2. Dreher, Axel & Hodler, Roland & Fuchs, Andreas & Parks, Bradley C. & Raschky, Paul & Tierney, Michael, 2015. "Aid on Demand: African Leaders and the Geography of China's Foreign Assistance," CEPR Discussion Papers 10704, C.E.P.R. Discussion Papers.
    3. Mitchell Watkins, 2022. "Undermining conditionality? The effect of Chinese development assistance on compliance with World Bank project agreements," The Review of International Organizations, Springer, vol. 17(4), pages 667-690, October.
    4. Mandon, Pierre & Woldemichael, Martha Tesfaye, 2023. "Has Chinese aid benefited recipient countries? Evidence from a meta-regression analysis," World Development, Elsevier, vol. 166(C).
    5. Kenichi Doi & Ami Ikeda & Yuki Murakami & Kazuo Kuroda, 2024. "Towards complete development finance data: Quantifying China's international education co‐operation and presence in the Global South," Development Policy Review, Overseas Development Institute, vol. 42(4), July.
    6. Sosso Feindouno & Michael Goujon, 2019. "Human Assets Index: Insights from a Retrospective Series Analysis," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 141(3), pages 959-984, February.
    7. Bei, Leticia Jin, 2019. "Where does the dragon’s gift go?: Subnational distribution of China’s aid to Sub-Saharan Africa from 2007 to 2012," LSE Research Online Documents on Economics 101349, London School of Economics and Political Science, LSE Library.
    8. Humphrey, Chris & Michaelowa, Katharina, 2019. "China in Africa: Competition for traditional development finance institutions?," World Development, Elsevier, vol. 120(C), pages 15-28.

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