The Political and Economic Dynamics of Foreign Aid: A Case Study of United States and Chinese Aid to Sub-Sahara Africa

Kafayat Amusa, Nara Monkam and Nicola Viegi

No 201628, Working Papers from University of Pretoria, Department of Economics

Abstract: The foreign aid arena as it pertains to the African continent has traditionally been dominated by the Organization of Economic Co-operation and Development (OECD) countries, however over the last three decades non-traditional donors such as the China, South Africa and Brazil have emerged in the donor field. The increasing importance of non-traditional donors has meant that the economic and political stronghold of Western and OECD countries in sub-Sahara African (SSA) has gradually ebbed, due to increased competition amongst donors on the continent. Specifically, as the economic and political reach of the United States (USA), the second largest bilateral donor to SSA has diminished, amongst the group of emerging donors, China has become the largest contributor of aid to SSA countries. There appears to be a political - economic dynamic that points to the existence of two competing reasons underpinning the foreign aid trend in SSA. Using a comparative approach, this study examines the determinants of aid allocation by China and the United States to SSA countries. The study finds that both donor motives and recipient need are factors in US and Chinese aid allocation to SSA. Additionally, the study finds di¤erences in US aid allocation determinants pre and post China’s entry into SSA’s aid …eld. Furthermore, evidence of income and population bias is observed for both donor countries.

Keywords: foreign aid allocation; donor motives; recipient need; Sub-Saharan Africa (search for similar items in EconPapers)
JEL-codes: F35 (search for similar items in EconPapers)
Pages: 36 pages
Date: 2016-04
New Economics Papers: this item is included in nep-pol
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

Downloads: (external link)
http://www.up.ac.za/media/shared/61/WP/wp_2016_28.zp84738.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:pre:wpaper:201628

Access Statistics for this paper

More papers in Working Papers from University of Pretoria, Department of Economics Contact information at EDIRC.
Bibliographic data for series maintained by Rangan Gupta ().