China in Africa: Exploring the influence of China’s involvement in southern Africa on the changing nature of the OECD aid regime

Abstract

In December 2011, a year of celebrations regarding the 50th anniversary of the OECD came to an abrupt end in Busan, where the international community blew out the candle of aid effectiveness, which had been a defining feature of the international aid regime until then. This master’s thesis will apply a critical realist approach in combination with a Drivers of Change (DoC) analysis to explore the influence of China’s rise as a provider of development finance to Africa, on the Western aid system administered by the OECD’s Development Assistance Committee. The paper identifies the key structures, institutions, and agents of the Chinese aid model and the OECD aid system, respectively, and engages into a case-based analysis of the interplay between China’s Export- Import Bank, the World Bank, the International Monetary Fund and the bilateral DAC donor agencies in relation to the governments of Angola and Zambia. The two Southern African countries reveal differing stances of China and the OECD-DAC donors towards the use of conditionality, the concept of ownership, and the actual sectoral allocation of funds. The thesis shows how the Chinese aid model is winning popularity among African leaders, thereby putting pressure on the OECD donors. The governments of Angola and Zambia are found to primarily be interested in the attraction of FDI and the consolidation of their power; two demands China is delighted to accommodate. The increasing leverage of China in the developing world, and other emerging donors, has led to signs of a rhetorical change within the OECD donor community, following the 4th High Level Forum on aid effectiveness in Busan, towards a focus on ‘win-win’ cooperation based on trade relations, affecting waning political support for the principles of the Paris Declaration. Hence, the thesis concludes that China has had an influence on the changing nature of the OECD aid regime in the last decade. The future will tell whether the diminished political interest in aid effectiveness also translates into a further decrease of the importance of ODA in the post-Busan era.