The Economic Consequences of China-Africa Relations: Debunking Myths in the Debate

Journal of Economic Issues

Nwachukwu

2017

This study complements existing literature on the aid-institutions nexus by focusing on political rights, aid volatilities and the post-Berlin Wall period. The findings show that while foreign aid does not have a significant effect on political rights, foreign aid volatilities do mitigate democracy in recipient countries. Such volatilities could be used by populist parties to promote a neocolonial agenda, instill nationalistic sentiments and consolidate their grip on power. This is especially the case when donors are asking for standards that majority of the population do not want and political leaders are unwilling to implement them. The empirical evidence is based on 53 African countries for the period 1996-2010. As a main policy implication, creating uncertainties in foreign aid for political rights enhancement in African countries may achieve the opposite results. Other implications are discussed including the need for an 'After Washington consensus'.JEL Classification: C53; F35; F47; O11; O55

Section: Foreign Aid Institutions and Democracy: Connecting The Dotsmentioning

confidence: 99%

Section: Foreign Aid Institutions and Democracy: Connecting The Dotsmentioning

confidence: 99%

Section: Implications For Underlying Debatesmentioning

confidence: 99%

See 1 more Smart Citation

Is the Threat of Foreign Aid Withdrawal an Effective Deterrent to Political Oppression? Evidence from 53 African Countries

Journal of Economic Issues

Nwachukwu

2017

“…In Egypt, the conception and definition of democracy has been revised several times. Tunisia's transition is yet to fully Given that Polity IV is also an indicator for priority in political rights; the results go a long way to extending the debate of 'the Washington Consensus versus the Beijing Model' on precedence between 'economic rights' and 'political rights' (Anyanwu & Erhijakpor, 2014;Asongu & Aminkeng, 2013;Lalountas et al, 2011;Asongu, 2014d;Moyo, 2013). Though an endogeneity robust empirical strategy has been employed, in light of the on-going debate, we are tempted to infer that issues of reverse causality may still be at play.…”

Section: Conclusion and Policy Recommendationsmentioning

confidence: 99%

On the Substitution of Institutions and Finance in Investment

2014

SSRN Journal

Self Cite

The Ali (2013, EB) findings on the nexuses among institutions, finance and investment could have an important influence on policy and academic debates. This paper relaxes his hypotheses on the conception, definition and measurement of finance and institutions because they are less realistic to developing countries to which the resulting policy implications are Using updated data (1996)(1997)(1998)(1999)(2000)(2001)(2002)(2003)(2004)(2005)(2006)(2007)(2008)(2009)(2010) from 53 African countries, we provide more robust evidence on the substitution of institutions and finance in investment. Results under many baseline and augmented scenarios are not consistent with the underlying paper. Justifications for the differences in findings are discussed. As a policy implication, the Ali (2013, EB) findings for countries with poor financial systems may not be relevant for Africa.

“…This bulk of literature has presented, among others: the short-term positive effects of the nexus (Duclos, 2011); decisions of investments that are based on resource-motivations and poor governance (Renard, 2011;Kolstad & Wiig, 2011;De Grauwe et al, 2012); the need for multi-polar development strategies ; push and pull factors motivating Chinese investments (Biggeri & Sanfilippo, 2009); hard political views of the nexus ; identification and explanation of the West's evolving suspicion of the nexus (Huliaras & Magliveras, 2008); debunking myths surrounding the nexus (Asongu & Aminkeng, 2013) and; suggesting strategies and solutions to the documented policy syndromes (Asongu & Ssozi, 2014).…”

Section: Introductionmentioning

confidence: 99%

A Development Consensus Reconciling the Beijing Model and Washington Consensus: Views and Agenda

2014

SSRN Journal

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Reconciling the two dominant development models of the Washington Consensus (WC) and Beijing Model (BM) remains a critical challenge in the literature. The challenge is even more demanding when emerging development paradigms like the Liberal Institutional Pluralism (LIP) and New Structural Economics (NSE) schools have to be integrated. While the latter has recognized both State and market failures but failed to provide a unified theory, the former has left the challenging concern of how institutional diversity matter in the development process. We synthesize perspectives from over 150 recently published papers on development and Sino-African relations in order to present the relevance of both the WC and BM in the long-term and short-run respectively. While the paper provides a unified theory by reconciling the WC and the BM to complement the NSE, it at the same time presents a case for economic rights and political rights as short-run and long-run development priorities respectively. By reconciling the WC with the BM, the study contributes at the same to macroeconomic NSE literature of unifying a development theory and to the LIP literature on institutional preferences with stages of development. Hence, the proposed reconciliation takes into account the structural and institutional realities of nations at difference stages of the process of development.