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ABSTRACT
China is now a major actor in global development and wields considerable influence in large parts of the world. The success of the Chinese development model has not only challenged the notion that democracy is necessary for development but also questioned the hegemony of the neo-liberal state encouraging and laying the foundations for a thriving private market economy. The Chinese model of aid, loans, and investments highlights the principles of ‘win-win’, ‘mutual respect’, and ‘non-interference’, based on the needs of a country as articulated by the recipient government. Yet, although Chinese aid does not explicitly aim to affect domestic policies and institutions in recipient countries, it does affect them. In this article, we explore the impact of Chinese aid practices – including grants, loans, and investment policies – on state legitimacy and the capacity of state institutions in sub-Saharan Africa and Latin America. We argue that while Chinese development interventions have highly diverse impacts in various geographical contexts, they tend to strengthen the elites that are in power – whether in government, or those supporting it from the outside. The extent to which Chinese policies contribute to strengthening state capacity depends on the incentives and visions that local elites possess.
Acknowledgement
This research has been undertaken under the aegis of the Oslo Academy of Global Governance. We would like to thank the rector of the University of Oslo for funding for this initiative.
Notes
1. Arrighi, Adam Smith in Beijing.
2. Zhang, “Chinese Capitalism.”
3. Harvey and Paik, “How Capital Operates.”
4. Strange, “China’s Post-Listian Rise.”
5. Li et al., “Difference or Indifference”; and Banik and Chasukwa, “The Impact of Emerging Donors.”
6. Dreher et al., “Apples and Dragon Fruits.”
7. Dreher et al., “Aid, China, and Growth.”
8. Chinese State Council’s official White Papers (2011, 2014).
9. Dreher et al., “Aid, China, and Growth,” 9.
10. For a summary of these principles, see: http://www.oecd.org/dac/effectiveness/parisdeclarationandaccraagendaforaction.htm.
11. Banik, “China and Poverty.”
12. Li et al., “Difference or Indifference.”
13. Dreher et al., “Apples and Dragon Fruits.”
14. North et al., Violence and Social Orders; Besley and Persson, “Wars and State Capacity” and Pillars of Prosperity; and Acemoglu and Robinson, Why Nations Fail.
15. Tilly, Coertion, Capital and European States.
16. Lund, “Twilight Institutions,” 676.
17. Sikkink, Ideas and Institutions, 4.
18. Hanson and Sigman, “Leviathan’s Latent Dimensions.”
19. Mann, The Sources of Social Power.
20. Jessop, State Power.
21. Hurd, “Legitimacy and Authority.”
22. Weber, Makt og byråkrati.
23. Saylor, State Building in Boom Times.
24. Migdal, Strong Societies.
25. O’Donnell, “One the State,” 1363–4.
26. Tilly, Coercion, Capital and European States.
27. Johnson, Japan, Who Governs?; Nordhaug, “Development Through Want of Security”; and Fine, “Beyond the Developmental State.”
28. Aronow et al., “The Effects of Aid”; Askarov and Doucouliagos, “Does Aid Improve Democracy?”; and Krasner and Risse, “External Actors.”
29. Wright, “Aid Effectiveness”; Aronow et al., “The Effects of Aid”; and Bull, “Governance.”
30. Grugel and Riggirozzi, “Post-neoliberalism”; and Bull, “Governance.”
31. Kentilekis, et al., “IMF conditionality,” 547.
32. Bull, “Governance.”
33. Kaplan, “Banking unconditionally”; and Oye, “Greater Africa-China.”
34. Zhang, “The Evolution of China Aid Policy” and “The Relevance.”
35. Zhang, “The Relevance.”
36. Sun, “Africa in China’s Foreign Policy.”
37. Bräutigam and Zhang, “Green Dreams.”
38. For details, see: http://www.focac.org/eng/zt/zgdfzzcwj/t230479.htm.
39. Li et al., “Difference or Indifference.”
40. Banik, “China and Poverty”; and Banik and Chasukwa, “The Impact of Emerging Donors.”
41. A sample of such speeches is available at: http://www.focac.org/eng/zfgx/.
42. Banik and Chasukwa, “The Impact of Emerging Donors.”
43. See Branko Milanovic 2017, https://www.theguardian.com/global-development-professionals-network/2017/may/17/belt-road-project-the-west-is-mired-in-soft-development-china-is-trying-the-hard-stuff.
44. Banik, “China and Poverty.”
45. “Major China-Africa infrastructure cooperation projects,” China Daily. March 26. http://www.chinadaily.com.cn/business/2017-03/26/content_28682186.htm.
46. Banik and Chasukwa, “The Impact of Emerging Donors.”
47. Banik, “China and Poverty.”
48. Banik and Hegertun, “Why do Nations Invest.”
49. See November 2016 report in The Nyasa Times, https://www.nyasatimes.com/malawi-university-science-technology-re-open-wednesday-water-problem-sorted/.
50. See Note 43.
51. Tull, “China’s Engagement in Africa”; and Schoeman, “China in Africa.”
52. Naim, “Rogue Aid.”
53. “Kenya opens Nairobi-Mombasa Madaraka Express railway,” BBC News. 31 May. http://www.bbc.com/news/world-africa-40092600.
54. Manji and Marks, African Perspectives on China; and Trofimov, “New Management.”
55. Banik, “China and Poverty.”
57. Banik, “China and Poverty.”
58. Ellis, “New Management.”
59. Gallagher and Irwin, “China’s Economic Statecraft.”
60. The Dialogue Latin America China Finance database. https://www.thedialogue.org/map_list/.
61. Myers and Gallagher, “Chinese finance to LAC.”
62. See Note 60.
63. Gallagher, The China Triangle.
64. Cameron and Hershberg, “Comparing Critical.”
65. CEPAL, “América Latina y el Caribe y China.”
66. Bull, “Latin America’s Decade of Growth”; and Schneider, “Designing Industrial Policy.”
67. Wolff, “Business Power”; and Spalding, “Business and State.”
68. As of 2015, only 5 products (all of them primary goods) made up 75% of Latin America’s export to China (CEPAL, “América Latina y el Caribe y China”; Jenkins 2012).
69. Costanini, “Strong winds are blowing.”
72. Corrales, “China and Venezuela’s Search.”
73. Gallagher and Irwin, “China’s Economic Statecraft.”
75 Avendano et al., Chinese FDI.
76. Gates, “Interest Groups in Venezuela.”
77. Hanson and Sigman, “Leviathans Latent Dimensions.”
78. Enríquez and Newman, “The Conflicted State.”
79. Hogenboom, “The Changing Politics.”
80. Andrade and Nicholls, “La relación entre capacidad y autoridad.”
81. Gonzales-Vicente, “South-South relations.”
82. Andrade and Nicholls, “La relación entre capacidad y autoridad.”
83. Martí i Puig, “Destitucionalizar para Gobernar”; Spalding, “Business and State”; and TThaler, “Nicaragua: A Return to Caudillismo.”
84. Chamorro, 2017.
85. Dussel Peters, “Chinese Investment in Mexico.”
86. China-Latin America Finance Database, https://www.thedialogue.org/map_list/.
87. Buscaglia, Vacíos de poder en México; Flores Pérez, El Estado en Crisis; Hogenboom, “The Changing Politics”; Salas-Porras, “Las élites neoliberales”; and Thacker, Big Business.
88. Hogenboom, “Mexico vs. China.”
89. Kouretsos, “Dragon on the Border.”
90. Avendano et al. Chinese FDI.
91. Examples include the car manufacturing deal between Mexico’s Giant Motors and China’s JAC Motors, deals to promote Mexican SMEs in China, participation of actors such as China National Offshore Oil Corp (CNOOC) in the Mexican oil industry.
92. Banik and Hegertun, “Why do Nations Invest.”
Additional information
Notes on contributors
Dan Banik
Dan Banik is a professor of political science and director of the Oslo SDG Initiative at the Centre for Development and the Environment, University of Oslo. His research interests include poverty, food security, famine, legal empowerment, aid, and the 2030 Agenda for sustainable development. He has, in recent years, conducted extensive research on Chinese aid and investments in Africa. Prof. Banik has previously served as the head of the Norwegian-Finnish Trust Fund in the World Bank for Environmentally and Socially Sustainable Development (TFESSD) and on the Board of the Norwegian Crown Prince and Crown Princess’s Foundation. His books include Political Transition, Poverty and Inclusive Development in Malawi: The Democratic Dividend (with Blessings Chinsinga, Routledge, 2016), The Legal Empowerment Agenda: Poverty, Labour and the Informal Economy in Africa (2011, Ashgate), Poverty and Elusive Development (2010, Scandinavian University Press), and Starvation and India’s Democracy (2009, Routledge).
Benedicte Bull
Benedicte Bull is a professor of political science and director of the Norwegian Latin America Research Network (NorLARNet) and the Oslo Academy of Global Governance, University of Oslo. Her research interests are development institutions, Latin American politics, political economy, and development with a particular focus on issues of state building, elites, and inequality. Her books include Norwegian Social Thought on Latin America (2016, CLACSO); Latinamerikanske utfordringer (2010/2015, Cappelen); Environmental Politics in Latin America: Elite Dynamics, the Left Tide and Sustainable Development (2014, Routledge/Earthscan, 2014, with Mariel Aguliar-Støen); Business Groups and Transnational Capitalism in Central America: Economic and Political Strategies (2014 Palgrave Macmillan, with Yuri Kasahara and Fulvio Castellacci); International Development, Vols. 1-4 (2010, 2010, with Morten Bøås), and Development Issues in Global Governance: Market Multilateralism and Private-Public Partnerships (2007, Routledge, with Desmond McNeill).