The limits of official development assistance in fostering economic growth : a comparative analysis of western and Chinese economic cooperation practices in Africa

Abstract

This dissertation explores the nature, significance and weight of Western and Chinese economic relations with Africa. The research first engages in comparative analysis of West – Africa and China – Africa politico-economic cooperation practices. On this basis, it then compares the working mechanisms of these practices to the mechanisms that promoted sustainable economic growth within mature (OECD) and recently developed (Asian Newly Industrialized Economies - NIEs) countries.

The empirical analysis of Africa’s balance of payments with its key economic partners – European Union and United States (as proxies for the West) and the People’s Republic of China – shows that Official Development Assistance (ODA) only represents between 4% and 6% of the total exchanges between the West and Africa, and even a smaller percentage of total exchanges between China and Africa. On the other side, a quantitative analysis of Africa’s trade, inward FDI, primary income, portfolio investments and capital flight suggests that they generally contribute in transferring financial resources from Africa towards Western countries and China.

The dissertation shows that, while ODA redistributes among African beneficiary countries a small percentage (generally well below the 0.7% GDP threshold set by the United Nations) of the wealth created within donor countries, both the West and China appear to extract solid rents and profits from their relations with Africa. The qualitative analysis of the institutional and normative frameworks that underpin such exchanges reveals that such frameworks are profoundly different from those that were put in place by OECD countries and NIEs to foster sustainable development within their own economies.

In sum, the dissertation argues that the institutional and normative frameworks in which African international economic relations are currently embedded are not helping to activate the productive social dynamics necessary for endogenous and sustainable economic growth in Africa.