The East is Red (Ink): China, Aid, and Debt Diplomacy in Sub-Saharan Africa

Abstract

China’s challenge to the Organization for Economic Cooperation and Development (OECD)-led donor regime in sub-Saharan Africa has piqued the interest of a small army of Western academics, many of whom argue that China gives development aid to Africa as a means to secure natural resources and political influence in recipient countries. I investigate how recipient country domestic politics – in this case the degree of ethnopolitical competition in sub-Saharan African countries – influences the allocation of Chinese foreign aid. I first theorize that, in countries with highly ethnically competitive political processes, leaders will utilize aid as a vehicle to cement their own political coalitions (the “effects” side). Because of a desire for aid rents, these countries will be incentivized to offer donors greater political and economic concessions in return for aid dollars (the “determinants” side). I evaluate this theory using two separate approaches. On the determinants side, I use fixed effects regression analysis to show that both China and OECD members donate to countries with greater degrees of ethnic political competition (thereby showing that the aid programs of OECD member nations are not immune to strategic considerations). On the effects side, I use a month of field work in Kenya and Tanzania to (1) demonstrate that Chinese aid has been captured by the ruling political coalition in Kenya but not in Tanzania; and (2) glean information into the nature of the concessions Kenya and Tanzania have offered in return for Chinese aid dollars. I find that both my theoretical framework and the mechanisms behind it are sound. In return for billions of Chinese aid dollars for unprofitable “prestige projects,” leaders of Kenya and Tanzania have tied their developmental models to China at the expense of their country’s economic futures, all while strengthening their own coalition’s hold on political power and increasing ethnic divisiveness.