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The West's aid dilemma and the Chinese solution?

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  • Xiaobing Wang
  • Adam Ozanne

Abstract

There are currently two contrasting approaches towards aid policy in Africa: that followed by the West is well known for its conditionality, selectivity and focus on direct financial support, while the approach adopted by China eschews conditionality and concentrates on infrastructure building. The Chinese approach has been criticised for its failure to create direct employment and because, it is argued, its unconditionality hampers good governance in Africa. However, this paper argues that the West faces a dilemma, in that governance and its improvements are endogenous to the economic development of a country. Making aid conditional upon governance therefore unduly penalises countries at the bottom. The Chinese approach, in contrast, avoids this dilemma by directly targeting constraints to development; it may therefore be more effective in generating long-run growth, which may in turn foster good governance.

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  • Xiaobing Wang & Adam Ozanne, 2012. "The West's aid dilemma and the Chinese solution?," Global Development Institute Working Paper Series 17712, GDI, The University of Manchester.
  • Handle: RePEc:bwp:bwppap:17712
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    References listed on IDEAS

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    3. World Bank, 2000. "Can Africa Claim the 21st Century?," World Bank Publications - Books, The World Bank Group, number 22962, December.
    4. William S. Sessions, 1990. "Washington," Challenge, Taylor & Francis Journals, vol. 33(4), pages 57-59, July.
    5. Zhang, Xiaobo & Fan, Shenggen & Zhang, Linxiu & Huang, Jikun, 2004. "Local governance and public goods provision in rural China," Journal of Public Economics, Elsevier, vol. 88(12), pages 2857-2871, December.
    6. Kaplinsky, Raphael & Morris, Mike, 2008. "Do the Asian Drivers Undermine Export-oriented Industrialization in SSA," World Development, Elsevier, vol. 36(2), pages 254-273, February.
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