Aid, China, and Growth: Evidence from a New Global Development Finance Dataset

Dreher, Axel; Fuchs, Andreas; Parks, Bradley C.; Strange, Austin M.; Tierney, Michael J.

doi:10.2139/ssrn.3051044

Cited by 159 publications

(171 citation statements)

References 71 publications

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“…Officials have maintained that a more forward-looking assessment of the investment-growth nexus is necessary, since infrastructural development addresses growth bottlenecks, ultimately contributing to long term debt sustainability by initiating a virtuous circle of investment, growth and poverty reduction (Li, 2007). 2 It was estimated that China provided US$350 billion in official finance from 2000 to 2014 with the bulk comprising non-concessional finance instead of official development assistance, and with a much clearer focus on infrastructure (Dreher et al, 2017). 2 It was estimated that China provided US$350 billion in official finance from 2000 to 2014 with the bulk comprising non-concessional finance instead of official development assistance, and with a much clearer focus on infrastructure (Dreher et al, 2017).…”

Section: Debt Sustainability Surveillancementioning

confidence: 99%

“…China has also placed substantial pressure upon the IMF-World Bank by providing alternative and significant sources of long-term 'patient capital' through the China Development Bank and Ex-Im Bank and thus 'more room to maneuver' (Kaplan, 2016). 2 It was estimated that China provided US$350 billion in official finance from 2000 to 2014 with the bulk comprising non-concessional finance instead of official development assistance, and with a much clearer focus on infrastructure (Dreher et al, 2017). Consequently, the DFS's threat of aid curtailment grew increasingly ineffective because of the rise of China as an alternative development finance provider.…”

Section: Debt Sustainability Surveillancementioning

confidence: 99%

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Tailoring for Development: China's Post‐crisis Influence in Global Financial Governance

Gruin

Knaack

2018

Global Policy

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China's increasing engagement in global financial governance since the 2008 crisis has potentially significant ramifications for global financial rule‐making and standard‐setting. This article presents a novel analysis of China's growing influence on the international stage and its consequences for the financial rules and standards that constrain policy makers in developing countries. We draw upon literature from international political economy and development studies to develop a framework for assessing whether China's rise has catalyzed a shift in global financial governance towards a tailored approach that responds to country‐specific developmental circumstances and needs. We argue that China's status as a rising power that still has idiosyncratic developmental priorities is leading it to push for rules and standards that are more flexible and sensitive to specific national development conditions. We illustrate this argument in three case studies, deploying the framework to explain variation in the post‐crisis evolution of rules in prudential banking regulation, capital flow management, and debt sustainability surveillance.

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Section: Debt Sustainability Surveillancementioning

confidence: 99%

Section: Debt Sustainability Surveillancementioning

confidence: 99%

Tailoring for Development: China's Post‐crisis Influence in Global Financial Governance

Gruin

Knaack

2018

Global Policy

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“…In the host countries, borrowing governments will be supportive if the projects create growth and employment, and do not threaten debt sustainability. A recent study by Dreher et al (2017) found that Chinese development finance was associated with global economic growth between 2000 and 2014 (although the World Bank contests such a view). Moreover, a recent Center for Global Development study suggests that Chinese development financing has in part jeopardized the debt sustainability of a number of BRI nations (Hurley et al, 2018).…”

Section: Complements Competitors and The Politics Of Productivitymentioning

confidence: 99%

Coordinated Credit Spaces: The Globalization of Chinese Development Finance

Chin¹,

Gallagher²

2019

Development and Change

102

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This article examines the emergence of Chinese development finance on the global stage and evaluates the extent to which it differs from, complements and/or competes with the Western‐backed development finance institutions. Whereas the new, China‐backed multilaterals are closer to the Western model, especially the Asian Infrastructure Investment Bank, this analysis finds that China's national development finance is significantly distinct along three parameters — the scale and business model of Chinese finance relative to its Western counterparts, the composition and approach of China's lending portfolio, and the governance of China's development finance institutions. These differences can be seen as complements to the Western‐backed system, given that much of Chinese development finance has flowed into countries and sectors in which Western development finance institutions have ventured to a lesser extent. However, the globalization of Chinese development finance, patterned on the international diffusion of what is coined in this article as the ‘coordinated credit space model’, contrasts with Western development finance, governance and business models, and has triggered a competitive stance from Western actors. Either contestation or convergence are possible trajectories for the future, and the outcome will be determined by whichever can produce conditions akin to the ‘politics of productivity’.

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“…Sources: China from AidData (Dreher et al, 2017), USA from OECD (2017a); AfDB and World Bank from respective annual reports. Note: Real 2013 US$.…”

Section: Figure 1 Cumulative Development Finance Commitments To Afrimentioning

confidence: 99%

“…What is more, a large share of the resources provided by China has been directed to economic infrastructure (transport, energy, water and telecoms), which many African countries have been clamoring for but which traditional aid providers-often focused instead on social and institutional issues like healthcare, primary education or governmental reform-have been less inclined to supply. Source: AidData (Dreher et al, 2017). Notes: Real 2013 US$.…”

Section: Figure 1 Cumulative Development Finance Commitments To Afrimentioning

confidence: 99%

China in Africa: Competition for traditional development finance institutions?

Humphrey

Michaelowa

2019

World Development

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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-often described as tools to exert the influence of wealthy western countries-might compete with China to maintain their relevance and influence in Africa. This study undertakes a combination of statistical tests and in-depth interviews with government officials in three recipient countries to see if this is the case, both in terms of overall finance levels as well as in the sectoral distribution of projects. The results indicate that total MDB finance levels by country change little over time regardless of Chinese activity. The same is true for funding levels of traditional bilateral donors. The sectoral allocation of concessional lending does not show any responsiveness either. In contrast, shifts in funding levels overall and in sector allocation can be observed for non-concessional countries; the latter, however, represent only a small minority among the recipients of Chinese finance. 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. Things may change, however, once more recipient countries develop economically and move into the non-concessional category.

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Aid, China, and Growth: Evidence from a New Global Development Finance Dataset

Cited by 159 publications

References 71 publications

Tailoring for Development: China's Post‐crisis Influence in Global Financial Governance

Tailoring for Development: China's Post‐crisis Influence in Global Financial Governance

Coordinated Credit Spaces: The Globalization of Chinese Development Finance

China in Africa: Competition for traditional development finance institutions?

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