Does Conditionality Still Work? China’s Development Assistance and Democracy in Africa

Chin. Polit. Sci. Rev. DOI 10.1007/s41111-017-0050-6 ORIGINAL ARTICLE Does Conditionality Still Work? China’s Development Assistance and Democracy in Africa Xiaojun Li1 Received: 25 August 2016 / Accepted: 27 January 2017 Ó Fudan University and Springer Science+Business Media Singapore 2017 Abstract Previous studies have found that the democratizing effect of conditional aid is temporally contingent: the collapse of the Soviet Union as an alternative source of aid enhanced the effectiveness of Western aid conditionality with respect to democratic reforms being adopted in Africa. Does conditionality still work with China’s rise as a major donor since the early 2000s? This article examines this question by leveraging the first Forum on China–Africa Cooperation (FOCAC) as the temporal dividing point and new measures of Chinese aid to Africa, based on expert opinions and media reports. The results show that the democratizing effects of the OECD’s development aid in Sub-Saharan Africa have indeed diminished. Furthermore, results from a synthetic control analysis suggest that major recipients of Chinese economic assistance did not achieve higher levels of political freedom than other comparable countries in the post-FOCAC period. These findings support the thesis that the democratizing effect of aid conditionality works only during a period when recipient countries do not have other alternative sources of aid, allowing donors to more credibly commit to enforcing conditionality. Keywords Foreign aid
Conditionality
Democracy
Africa
China Electronic supplementary material The online version of this article (doi:10.1007/s41111-017-0050-6) contains supplementary material, which is available to authorized users. & Xiaojun Li 1 Department of Political Science, The University of British Columbia, C425-1866 Main Mall, Vancouver, BC V6T 1Z1, Canada 123 Chin. Polit. Sci. Rev. 1 Introduction Proponents of foreign aid argue that one mechanism by which aid can contribute to democratization in recipient countries is through conditionality—i.e., the exercise of leverage by donors who attach conditions of democratic governance to the disbursement of aid (Robinson 1993; Stokke 2013; Stone 2008). Conditionality does not always work, however, when donors have other, competing, priorities (Bearce and Tirone 2010). This was the case during the Cold War when the United States and other donors gave aid to ‘‘strengthen corrupt but geopolitically useful autocracies’’ (Brautigam and Knack 2004, 275). When the Cold War ended, Western donors could refocus on using conditional aid to push for democratic changes. The temporal effect of aid conditionality is supported by empirical evidence; scholars have shown that the relationship between conditional aid and democratic transition in Africa and beyond is contingent upon the historical context (Bermeo 2016; Djankov et al. 2008; Dunning 2004; Kelley 2008; Kersting and Kilby 2014; Knack 2004; Wright 2009). China’s rise as a major donor to Africa (and developing countries in general) may pose new challenges to the effectiveness of aid conditionality in the new millennium (Qian 2015). Since the first Ministerial Conference of the Forum on China–Africa Cooperation (FOCAC) in 2000, the amount of Chinese development assistance going into Africa, including aid and finance, has been increasing exponentially (Thaler 2012).1 Besides the increased amount, China’s assistance is often considered more attractive by recipient countries because it has few or no political strings attached and is often disbursed much more quickly and efficiently than assistance from Western nations. Consequently, while traditional donors have criticized China’s approach to aid, many African countries embrace the assistance from Beijing, or at least are glad to have more options. Does conditionality still work with this change in the aid landscape? Building upon earlier work on aid conditionality and the credible commitment problem in donor–recipient relationships, this article argues that the increased availability of Chinese aid will encourage African recipients to resist pressure from Western donors to improve democratic governance. In the meantime, traditional donors may also feel compelled to compete with the new donors, reducing their credibility in enforcing the conditions. Consequently, the positive relationship between Western aid and democracy among the African recipients will dissipate as the amount of Chinese aid increases. Few studies have tested the effect of Chinese aid cross-nationally due to the paucity of reliable data, relying instead on case studies (Chen and Kinzelbach 2015; Hackenesch 2015). This article circumvents this problem using the first Ministerial Conference of FOCAC as the temporal dividing point, as well as new measures of Chinese aid to Africa, based on expert opinions and media reports. Empirical analysis shows that the democratizing effects of OECD development aid in SubSaharan Africa have indeed diminished in the twenty-first century. Furthermore, results from a synthetic control analysis suggest that the major recipients of Chinese 1 In this paper, I use the words ‘‘aid,’’ ‘‘assistance,’’ and ‘‘finance’’ interchangeably. 123 Chin. Polit. Sci. Rev. economic assistance have registered lower levels of political freedom than other comparable countries in the post-FOCAC period. This article makes several contributions to the literature on donor intent in aid giving and international democratization. The empirical findings support the thesis that aid conditionality works only during a period when recipient countries do not have alternative sources of aid, allowing donors to more credibly commit to enforcing aid conditionality. The temporal divergence in the effects of aid conditionality also suggests that future studies should consider disaggregating the post-Cold War period when examining the aid–democratization relationship. The remainder of the article consists of five sections. Section 2 briefly reviews the literature on aid conditionality, focusing on recent scholarship that demonstrates that the effect of aid conditionality is temporally contingent. Section 3 lays out the main argument that the availability and influx of China’s ‘‘no-strings-attached’’ aid to the African continent in the 2000s dampened the efforts of Western donors to make aid conditional upon democratic governance. Section 4 discusses the research design and data used to test the hypotheses derived in the previous section. Section 5 presents the main empirical results. The last section concludes with some discussion on the policy implications of the findings. 2 Donor Intent, Aid Conditionality, and Democracy in Recipient Countries A large body of literature has explored the relationship between foreign aid and democracy in recipient countries, leading to two contrasting views on the effectiveness of aid in promoting democracy. Skeptics maintain that aid inhibits d (...truncated)