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Report Part Title: Understanding development power

Report Title: Crafting development power


Report Subtitle: Evolving European approaches in an age of polycrisis
Report Author(s): Yunnan Chen, Raphaëlle Faure and Nilima Gulrajani
Published by: ODI (2023)
Stable URL: https://www.jstor.org/stable/resrep51669.9

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6 ODI Report

2 Understanding development power


In 2011, the United Kingdom’s Secretary of State LWVHOIIURPWKHH[SOLFLWSXUVXLWRISRZHUHYHQLI
for International Development Andrew Mitchell KLJKLQFRPHFRXQWULHVSURYLGLQJDLGWRORZHU
made a striking comparision between US and LQFRPHRQHVLVXQGRXEWHGO\DQH[SUHVVLRQRIVWDWH
UK engagements in global development: ‘Just status and influence.
as the Americans are a military superpower,
we are a development superpower – we are in 7KHODQJXDJHRISRZHUGRHVQRWDOZD\VVLWHDV\
the lead’ (Brown, 2011).The term ‘development ZLWKJOREDOGHYHORSPHQWSUDFWLWLRQHUVZKRDUH
superpower’ resonated in a former Great Power more comfortable trading in the nobler goals of
like the UK which was looking for alternative IUHHGRPVXVWDLQDELOLW\DQGHTXLW\7KLVLVEHFDXVH
sources of influence to substitute for the WKLVYRFDEXODU\WHQGVWRUHGXFHGHYHORSPHQW
coercive powers of empire it once possessed. WRDVWUDWHJLFDSSDUDWXVLQWHQGHGWRZLQŒKHDUWV
DQGPLQGVœ 3DPPHQW=LHOLāVND DQG
0LWFKHOOUHWXUQHGWRJRYHUQPHQWWRWDNHXSWKH WKDWSUHVVHVLWVHOILQWRWKHGLUHFWVHUYLFHRISXEOLF
UROHRI0LQLVWHURI6WDWHIRU'HYHORSPHQWDQG GLSORPDF\DQGJHRVWUDWHJ\<HWWKLVGLVFRPIRUW
$IULFDLQWKH8.)RUHLJQ&RPPRQZHDOWKDQG needs to be grappled with, both to temper and
'HYHORSPHQW2IILFH )&'2 LQ2FWREHU$ FLUFXPVFULEHGHYHORSPHQWSRZHUœVSRWHQWLDOKDUP
GHFDGHRQIURPKLVLQLWLDOUHPDUN0LWFKHOOLVQRZ DQGWRLQFHQWLYLVHLWVFDSDFLW\WRGRJRRG
FRPPLWWHGWRUHEXLOGLQJWKH8.DVDGHYHORSPHQW
superpower.%XWZKDWH[DFWO\LVDGHYHORSPHQW  )RUHLJQDLGIRUGRPHVWLFLQIOXHQFH
SRZHU":KDWDUHLWVEDVLFHOHPHQWVLQDZRUOG
where an aid war chest is but one (diminished) $LGTXDQWLW\LVDFRPPRQLQGLFDWRUWRDVVHVVWKH
aspect of the political armoury of the nation stock of national power and global presence in
0RUJHQWKDX "$QGKRZLVLWH[SHFWHG PDQ\FRPSRVLWHLQGLFHVZLWK2'$DQDWWULEXWH
to generate effects that raise national status of state diplomatic or international economic
DQGLQIOXHQFH",WVHHPVDQHZPRGHORXWOLQLQJ strength that sits alongside military prowess
the relationship between a wider range of RUFXOWXUDOGRPLQDQFH )LJXUH But foreign
GHYHORSPHQWLQVWUXPHQWVDQGQDWLRQDOSRZHULV aid is also a platform from which national
UHTXLUHG7KLVVHFWLRQDLPVWRRIIHURQH influence can be created, allies courted and
agendas diffused. History has shown aid
2.1 What is development power? to be a valuable instrument for advancing
diplomatic and economic interests.7KXVWKH
3RZHUDVSLUDWLRQVDQGFRQWHVWDWLRQVKDYHDOZD\V SRVWZDUUHFRQVWUXFWLRQRI(XURSHXQGHUWKH
LQWHUVHFWHGZLWKWKHSUDFWLFHRIGHYHORSPHQW 86OHG0DUVKDOO3ODQGRXEOHGDVDQ$PHULFDQ
6LQFHWKHHQGRIWKH&ROG:DUKRZHYHUJOREDO H[SRUWSURPRWLRQVWUDWHJ\E\DWWHPSWLQJWR
GHYHORSPHQWSROLF\KDVODUJHO\VRXJKWWRGLYRUFH UHYLYHJOREDOWUDGHIORZVZKLOHDOVRSURYLGLQJD
democratic bulwark against a growing communist

 ZZZGHYH[FRPQHZVPLWFKHOOXNPXVWUHVWUXFWXUHIFGRWRUHJDLQDLGVXSHUSRZHUVWDWXV

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7 ODI Report

WKUHDW 0RUJHQWKDX(LFKHQJUHHQ  7KHUHLVQRVXUSULVHWKHQWKDWLGHQWLW\DVa


0RUHUHFHQWO\FRXQWULHVLQWKH*OREDO6RXWKKDYH development ‘superpower’ has long been
EHHQSURYLGLQJDVVLVWDQFHWRVLJQDOWKHLUJURZLQJ associated with the size of a country’s ODA
economic maturity and capacity to support and commitments.7KH2'$JURVVQDWLRQDO
VSRQVRUORZLQFRPHFRXQWULHV *XOUDMDQLDQG LQFRPH *1, WDUJHWLVDQLPSRUWDQWEHQFKPDUN
6ZLVV 7KLVVLJQDOLVIHOWHYHQZKHQ for donor commitment to, and effort for,
such financing is small and built around singular GHYHORSPHQWHYHQLILWKDVQHYHUEHHQIRUPDOO\
WHFKQLFDODVVLVWDQFHSURMHFWV UDWLILHGDVDJOREDOREMHFWLYH &OHPHQVDQG0RVV
 /HDJXHWDEOHVUDQNLQJFRXQWULHVE\WKLV
In international relations, aid is one of the most informal target remain a source of competition
frequently cited tools for increasing influence DPRQJWKHGRQRUFRPPXQLW\RIWKH*OREDO1RUWK
RYHUVHDV7KHUHLVKRZHYHUDWHQGHQF\IRUWKLV VXFKWKDWDGRZQZDUGPRYHPHQWLVRIWHQYLHZHG
capacity for influence to be taken as read, without as a signal of deteriorating global standing, or
H[SORULQJLWVH[WHQWQDWXUHDQGRULJLQV /DQJDQ ŒPLQQRZKRRGœDPRQJ'HYHORSPHQW$VVLVWDQFH
LQ2OLYL«DQG2œ6KHD :KHUHVXFK &RPPLWWHH '$& PHPEHUV 'LVVDQD\DNH
H[SORUDWLRQH[LVWVLWVLWVPDLQO\DVDTXDOLWDWLYH  7KLVLVHYHQDVRWKHUSROLFLHV HJWUDGH
GLVFXUVLYHDQDO\VLVRIKRZDLGFDQEHXVHGWR migration, technology) and financial flows (e.g.
H[HUWSRZHUUHJLRQDOO\DQGJOREDOO\7KHUHDUH QRQFRQFHVVLRQDOGHEWHTXLW\LQYHVWPHQW
only a handful studies empirically assessing UHPLWWDQFHV LPSLQJHRQWKHWUDMHFWRU\RID
WKHTXDQWLWDWLYHUREXVWQHVVRIWKHDVVRFLDWLRQ ORZLQFRPHFRXQWU\œVQDWLRQDOGHYHORSPHQW
EHWZHHQDLGJLYLQJDQGSRZHU %R[ 7KHVH prospects.
VWXGLHVDGRSWWKHSHUVSHFWLYHRIDVLQJOHSURYLGHU
nation, most often significant global powers like $V2'$SURYLGHUVGUDZRQDZLGHUVHWRIIORZV
&KLQDDQGWKH86 'LHWULFK0DKPXGDQG:LQWHUV policies and assets, it seems inaccurate to
(LFKHQDXHU)XFKVDQG%UXHFNQHU UHIHUHQFHWKHLUGHYHORSPHQWSRZHURQO\LQ
&XVWHUHWDO:HOOQHUHWDO 0LGGOH terms of the quantity of their aid spend alone.
SRZHUVIRUWKHPRVWSDUWUHPDLQXQGHUVWXGLHG 7KLVPD\KDYHEHHQDSSURSULDWHIRUWKHPDMRULW\
7RROVRIGHYHORSPHQWFRRSHUDWLRQEH\RQGDLG RIWKHSRVWZDUHUDZKHUHVWDWHWRVWDWHDLG
UHPDLQODUJHO\XQGHUVWXGLHGDVYHKLFOHVRISRZHU SURYLGHGVWDWXVDQGLQIOXHQFHEXWLWVHHPVULJLGO\
ZLWKWKHH[FHSWLRQRIVRPHVWXGLHVRI&KLQDWKDW XQLGLPHQVLRQDOLQDZRUOGZKHUHGHYHORSPHQW
cast an eye on the ways both concessional and SRZHUHVSHFLDOO\DPRQJDJURZLQJVHWRI0,&V
QRQFRQFHVVLRQDOSXEOLFILQDQFHDUHPDUVKDOOHGWR draws from multiple sources, which likely
FUDIWQDWLRQDOLQIOXHQFHPRVWQRWDEO\LQ$IULFD LQFOXGHVEXWDOPRVWFHUWDLQO\H[WHQGVEH\RQG
2'$FRPPLWPHQWV2XUXQGHUVWDQGLQJRIWKH
UHODWLRQVKLSEHWZHHQGHYHORSPHQWFRRSHUDWLRQ
and national power needs updating.

 )RUDJRRGRYHUYLHZRIVHYHUDOSLHFHVLQWKLVYHLQVHH2OLYL«DQG3HUH]  
 )RUPRVWRIWKLVKLVWRU\WKH86KDVRFFXSLHGDSROHSRVLWLRQDVDQDLGVXSHUSRZHUKDYLQJLQVWLWXWLRQDOLVHG
DQGGLŽXVHGWKHFRQFHSWRIDLGDQGSRVVHVVHGWKHODUJHVWDLGEXGJHWLQDEVROXWHWHUPV VWLOOWKHFDVHWRGD\WKRXJK
WKH86GRHVQRWPHHWWKH2'$*1,WDUJHW 

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8 ODI Report

Box 1 Empirical approaches to the study of aid and power

There are two principal empirical approaches used to explore the relationship between aid and
national power. One approach examines the ways aid cultivates public opinion within
recipient countries, for example through branding aid-provided goods and services. The logic
tests whether aid can generate positive public attitudes and win the ‘hearts and minds’ of citizens
in the aid-receiving country (Custer et al; 2015, 2018, 2021; Dietrich, Mahmud and Winters, 2018).
Results suggest that the provision of aid does foster positive perceptions among foreign publics
and improve donor reputational legitimacy.5 A recent contribution by Blair, Marty and Roessler
 H[WHQGVWKLVUHVHDUFKE\ORRNLQJDWWKHHŽHFWVRIDLGRQFLWL]HQSHUFHSWLRQVLQFRXQWULHV
where both China and the US are donors. They conclude that when these geopolitical rivals
GHOLYHUDLGWRWKHVDPHFRXQWU\DWWKHVDPHWLPHWKLVGHFUHDVHVDƀQLLWLHVIRU&KLQDDQGLQFUHDVHV
DƀQLWLHVIRUWKH8QLWHG6WDWHV&KLQHVHLQIUDVWUXFWXUHSURMHFWVKDYHDQHWQHJDWLYHHŽHFWRQ
SHUFHSWLRQVRI&KLQDDQGDQHWSRVLWLYHHŽHFWRQSHUFHSWLRQVRIWKH866 Aid does seem to be a
ZD\WRFXOWLYDWHSXEOLFDWWLWXGHVDQGQDWLRQDOLPDJHRYHUVHDVDQGHQKDQFHLQWHUQDWLRQDOLQſXHQFH
strengthening persuasive, moral and agenda-setting powers.

A second approach focuses on the relationship between aid and measurable increases
in power, for example testing whether US aid induces recipient governments to vote with
the donor country in the United Nations General Assembly (Dreher, Nunnenkamp and Thiele,
 RUZKHWKHUFRXQWULHVFDQHŽHFWLYHO\ŒEX\œDWHPSRUDU\VHDWRQWKH816HFXULW\&RXQFLO
(Reinsberg, 2019). Studies here largely conclude that aid can acquire votes in the General Assembly
and the Security Council. Beyond this econometric work, several qualitative studies have shown
KRZ&KLQHVHVWDWHGLUHFWHGžQDQFLQJIRVWHUVLQWHUSHUVRQDOVRFLDOERQGVDPRQJHOLWHVWRFUHDWH
perceptions of a new ‘China-centric’ world order, develop economic ties, and advance national
interests (Custer et al., 2021; Kassenova, 2022).

 )RUH[DPSOHDPXOWLQDWLRQDOVXUYH\HVWDEOLVKHGWKDW3(3)$5VXEVWDQWLDOO\LPSURYHGSHUFHSWLRQVRIWKH86LQ
UHFLSLHQWFRXQWULHV *ROGVPLWK+RULXFKLDQG:RRG 
 :KLOHWKHDXWKRUVFDQQRWFRQFUHWHO\H[SODLQWKHVHUHVXOWVWKH\K\SRWKHVLVHWKDW&KLQHVHDLGLVQRWWUDQVODWLQJ
LQWRDƀQLW\IRU&KLQDEHFDXVHRISHUFHSWLRQVRIVXEVWDQGDUGSURMHFWDQGSURGXFWTXDOLW\UHOLDQFHRQXQGHPRFUDWLF
OHDGHUVWKHEHKDYLRXURI&KLQHVHFLWL]HQVOLYLQJLQWKHUHVSRQGHQWœVFRXQWU\DQGDORVVRIORFDOMREVDQGEXVLQHVVHVGXH
WR&KLQHVHFRPSHWLWLRQ %ODLU0DUW\DQG5RHVVOHU 

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9 ODI Report

Table 1 Composite power indices using ODA to rank countries’ stock of power or global presence

Source Dimensions ODA indicator Rationale for ODA ODA weight


as proxy for

Asia Power /RZ\,QVWLWXWH  (FRQRPLF (FRQRPLF *OREDODQGUHJLRQDO RI


Index7 FDSDELOLW\   relationships 2'$DVPHDVXUHRI RYHUDOOLQGH[
(FRQRPLF economic diplomacy weight
UHODWLRQVKLSV  
0LOLWDU\FDSDELOLW\
 5HVLOLHQFH  
'HIHQFHQHWZRUNV  
)XWXUHUHVRXUFHV  
&XOWXUDOLQſXHQFH  
'LSORPDWLFLQſXHQFH

Soft Power 3RUWODQG  (QWHUSULVH   (QJDJHPHQW 0HDVXUHRIDFRXQWU\œV 8QNQRZQ


Index8 &RPPXQLFDWLRQV &XOWXUH  'LJLWDO VXELQGH[ foreign policy
 *RYHUQPHQW resources,
 (QJDJHPHQW   global diplomatic
(GXFDWLRQ IRRWSULQWDQGRYHUDOO
contribution to the
international
FRPPXQLW\(VVHQWLDOO\
it captures
the ability of
states to engage
with international
DXGLHQFHVGULYH
collaboration, and
ultimately shape global
outcomes

Global 5HDO,QVWLWXWH(O  (FRQRPLF Soft presence 2'$DVDPHDVXUH RIWRWDO


Presence &DQR SUHVHQFH  0LOLWDU\ RIGHYHORSPHQW LQGH[ZHLJKW
Index SUHVHQFH  6RIW cooperation
SUHVHQFH  6FDOLQJ
factors

 KWWSVSRZHUORZ\LQVWLWXWHRUJ
 KWWSVVRIWSRZHUFRP

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10 ODI Report

Source Dimensions ODA indicator Rationale for ODA ODA weight


as proxy for

Audit of Henry Jackson  1DWLRQDOEDVH   1DWLRQDO $ODUJH2'$EXGJHW RIWRWDO


Geopolitical Society 1DWLRQDOVWUXFWXUH   instruments RYHUDVXVWDLQHG LQGH[ZHLJKW
Capability 1DWLRQDOLQVWUXPHQWV (diplomatic SHULRG žYH\HDUV 
 1DWLRQDOUHVROYH OHYHUDJH  indicates a
KLJKOHYHORIHFRQRPLF
GHYHORSPHQW
and an ability to
shape the goals of
international
GHYHORSPHQWZLWK
potential
SRVLWLYHIHHGEDFNIRU
JOREDOLQſXHQFHDQG
reputation

 7KHIRXUFDSDELOLWLHVRISRZHU Power over othersFDQEHH[HUFLVHGDVDcoercive


stick, like military force or trade tariffs. Such
IR literature suggests that power can produce SRZHULVDWDQJLEOHH[SUHVVLRQRIPDWHULDOVWUHQJWK
effects in two main ways. First, power over others RYHURWKHUV:KLOHKDUGSRZHULVXVHGWR
FDQLQFHQWLYLVHRWKHUVWRGRVRPHWKLQJWKH\ FRPPDQGE\WKUHDWŒVRIWSRZHUœFRRSWVWKURXJK
ZRXOGQRWRWKHUZLVHGR 'DKO )RU'DKO DWWUDFWLYHQHVVWKDWŒZLQVKHDUWVDQGPLQGVœ
this required an immediate and tangible causal 3DPPHQW=LHOLāVND 1RUPDOO\
FRQQHFWLRQEHWZHHQWKHVXEMHFWDQGREMHFWRI GHYHORSPHQWDVVLVWDQFHLVFRQVLGHUHGDVRIW
SRZHU$VHFRQGGLPHQVLRQRISRZHUUHODWHVWR SRZHUDOWHUQDWLYHWRKDUGFRHUFLYHSRZHUWKRXJK
the ability to influence the decisions of others. aid has also sustained brutal internal security
7KLVLVWKHŒpower toœSHUVXDGHDFWRUVUHGXFH UHJLPHVDQGDXWKRULWDULDQSUDFWLFHVRYHUVHDV
SROLF\FRQIOLFWVLQIOXHQFHYDOXHVDQGSUDFWLFHVDQG *LURG 
ILQDOLVHGHFLVLRQV %DFKUDFKDQG%DUDW] 

 :HDOVRNQRZWKDWPLOLWDU\SRZHULVQRWDJXDUDQWHHRIFRHUFLYHFDSDELOLWLHVRQHQHHGRQO\FRQVLGHU5XVVLDœV
LQYDVLRQRI8NUDLQHDVDUHFHQWH[DPSOHRIWKHOLPLWVRIRQHRIWKHZRUOGœVODUJHVWDUPHGIRUFHV :RRGV 
 7KHGLVWLQFWLRQEHWZHHQŒSRZHURYHUœDQGŒSRZHUWRœPLUURUVWKHGLŽHUHQFHEHWZHHQKDUGDQGVRIWIRUPVRI
SRZHU 1\H 
 ,WLVZRUWKQRWLQJWKDWWKHGHPDUFDWLRQEHWZHHQKDUGDQGVRIWSRZHUFDQEHIX]]\7KLVLVEHVWLOOXVWUDWHG
E\ZKDWVRPHDQDO\VWVQRZFDOOŒVKDUSSRZHUœDVWUDWHJ\RIKDUGSRZHUFRHUFLRQDQGVRIWSRZHUFKDUPH[HUFLVHGE\
DXWKRULWDULDQVWDWHVŒSLHUFLQJœWKHSROLWLFDODQGLQIRUPDWLRQHQYLURQPHQWVLQWDUJHWHGFRXQWULHVWKURXJKGLVLQIRUPDWLRQ
FHQVRUVKLSDQGLQIRUPDWLRQFRQWURO :DONHUDQG/XGZLJ 

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11 ODI Report

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RFFXUVWKURXJKWKHLQWHUQDOLVDWLRQRIEHKDYLRXUV donor engagement on climate change may also
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transforms almost imperceptibly and endows VSHQGLQJWKDWODUJHO\EHQHILWV1RUWKHUQLQGXVWULHV
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SRYHUW\GHIOHFWHGDWWHQWLRQDZD\IURPWKHGULYHUV OHYHUDJHagenda-setting power represents the
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countries economically and politically influential REYLRXVPHDQVIRUH[DPSOHYLDFXOWXUDOFHQWUHV
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FRVWŒEULEHVœWKDWFDQSXUFKDVHVXSSRUWDQGEX\ IRU'$&GRQRUVWRFRQVLGHUWKHZD\GRPHVWLF
off opposition under the pretense of economic LQGXVWULDOSROLF\FRQFHUQVLQWHUVHFWZLWKRYHUVHDV
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a desire for such persuasive power 7UXPDQ up a space to consider the returns flowing to the
 7KHLQYHQWLRQRIDLGFRD[HGDGLYHUVH SURYLGHUQDWLRQDVOHJLWLPDWHŒZLQZLQVœWKDWFDQ
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DJDLQVWWKH6RYLHW8QLRQDQGHQKDQFH(XURSHDQ *XOUDMDQLDQG6LOFRFN 

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'HVSLWHWKHXVHRIDLGWRFRPEDW,VODPLFH[WUHPLVPLQWKHDIWHUPDWKRIFRPPLWPHQWVWRSRYHUW\UHGXFWLRQ
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12 ODI Report

7KXVSRZHUFDQEHDQDO\WLFDOO\GLVVHFWHGLQWRIRXU WDQJLEOHLQFHQWLYHVRUDWWULEXWHV2IFRXUVHWKHVH
FDSDELOLWLHVŐFRHUFLYHSHUVXDVLYHDJHQGDVHWWLQJ four capabilities of power are hard to dissect from
DQGPRUDOŐWKURXJKZKLFKJHRSROLWLFDOHIIHFWVDUH RQHDQRWKHU)RUH[DPSOH2'$FDQEHYLHZHG
WKHQFUHDWHG )LJXUH 7KLVXQGHUOLQHVWKHSRLQW simultaneously as an inducement to persuade,
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to be measured; it is also an action that is meant RIPRUDOVWDQGLQJLQWKHZRUOG1HYHUWKHOHVV
WRLQGXFHEHKDYLRXUDOFKDQJH 2OLYL«DQG2œ6KHD dissecting power into its four capabilities
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SRZHUODUJHO\RSHUDWHLQWDQJLEO\E\FXOWLYDWLQJ for understanding the relationship that links
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SHUVXDVLYHFDSDELOLWLHVDUHSURGXFWVRIPRUH in the world.

Figure 1 A typology of power capabilities


Tangible

COERCIVE PERSUASIVE
The ability of A to get B The ability of A to influence B
to do what they otherwise to do what they otherwise
would not through material would not through
threats or punishment incentives or rewards

Power Power
over to

AGENDA-SETTING MORAL
The ability of A to influence decisions The ability of A to influence decisions
of B by shaping agendas, norms and of B to do what A wants because
rules of the system, so B chooses B has internalised A’s
what A wants from a limited interests as their own and
set of choices shares them

Intangible

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13 ODI Report

Box 2 China’s competitive advantages as a development actor

China has a historical legacy as a provider of aid, under the umbrella of southŐsouth cooperation
(Bräutigam, 2011). But it was not until the early 2000s that its role as a provider of concessional
žQDQFHUHDOO\WRRNRŽZLWKDJURZLQJSUHVHQFHDVDWUDGHSDUWQHUDQGLQYHVWRULQWKH$IULFDQ
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WKHFRQGLWLRQVIRURYHUFDSDFLW\DVZHOODVWKHLQſDWLRQDU\FRQVHTXHQFHVRIODUJHIRUHLJQUHVHUYHV
led to a shift in this model to one characterised by non-concessional lending (Strange et al. 2022).
This culminated in the Belt and Road Initiative (BRI), announced in 2013, which has since become
enshrined in China’s foreign and development policy.

In China, there is also no clear distinction between the developmental purposes of aid and other
GLSORPDWLFDQGHFRQRPLFSROLF\REMHFWLYHVDLGLVH[SOLFLWO\OLQNHGWRVWUDWHJLFIRUHLJQSROLF\
goals (foremost ostracising and isolating Taiwan) and to creating markets for Chinese exports,
technologies and companies.

7KLVLVUHſHFWHGLQWKHPRGDOLWLHVRI&KLQHVHGHYHORSPHQWžQDQFHWKHEXONRIZKLFKFRPHVIURP
state-owned policy banks and which sometimes blurs the line between foreign aid and commercial
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'HYHORSPHQW 2(&' '$&DQGLVQRWVXEMHFWWRUXOHVDURXQGXQW\LQJDLGQRULVLWDVLJQDWRU\WR
WKH2(&'$UUDQJHPHQWRQH[SRUWFUHGLWVWKDWJRYHUQVWKHŒOHYHOSOD\LQJžHOGœRIWUDGHžQDQFH7KH
SURYLVLRQRIDLGVXEVLGLVHGFRQFHVVLRQDOžQDQFHIURPWKHH[SRUWFUHGLWDJHQF\&KLQD([LPEDQN
is a clear example of this merging of aid and export credit activities. Cultivation of allies among
resource-rich nations has also been notable, aligning with China’s resource diplomacy to secure
key commodity assets for its growing industries. Resource collateralisation has also been a distinct
feature across a portion of China’s overseas lending.

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notably, 2014 saw the creation of two Global South-led MDBs, the BRICS New Development Bank
and the Asian Infrastructure Investment Bank (AIIB), where China is a primary shareholder. This
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participation of European states in the AIIB and growing bilateral trade and investment, particularly
with the UK and Germany.

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FUHGLWVSDFHœEHWZHHQžQDQFLHUVDQGžUPV &KLQDQG*DOODJKHU DOORZVLWGHSOR\LWV
GHYHORSPHQWžQDQFHDWVSHHGLQWKHVHUYLFHRIFULWLFDOLQIUDVWUXFWXUHDQGQDWXUDOUHVRXUFH
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14 ODI Report

has provided additional advantages. China’s willingness to side-step norms on development


HŽHFWLYHQHVVDQGLWVUHODWLYHODFNRIVDIHJXDUGVDURXQGVRFLDODQGHQYLURQPHQWDOLPSDFWVDQG
good governance – instead often relying on weaker host government institutions and frameworks
– present lower transaction costs for host countries compared to multilateral or bilateral donor
SURMHFWV1RQHWKHOHVVWKLVKDVDOVRUDLVHGDODUPVRYHUWKHZHDNHQLQJDELOLW\RI1RUWKHUQGRQRUVWR
advance these agendas among recipients (Woods, 2008).

6LQFHKRZHYHUELODWHUDOGHYHORSPHQWžQDQFH LQWKHIRUPRIERWKORDQVDQGJUDQWEDVHG
aid) has been in decline as China’s economy has slowed and banking regulations have tightened
*DOODJKHUDQG5D\ OHDGLQJWRDGLPLQLVKHGSURžOHRIWKH%5,LQ&KLQDœVIRUHLJQSROLF\Ő
ZKLOHWKHQHZHU*OREDO'HYHORSPHQW,QLWLDWLYHLQGLFDWHVDGLYHUVLžFDWLRQDQGVKLIWLQKRZ&KLQHVH
institutions approach development cooperation (Chen, 2022). Most saliently, the impact of the
Covid-19 pandemic has reignited controversy and criticism over the role of Chinese lending for
sovereign debt distress, particularly Africa. Backlash against Chinese lending in the Global South,
SDUWLFXODUO\LQLWVUHVSRQVHVWRGHEWUHVWUXFWXULQJRŽHUVDQHZRSHQLQJIRU1RUWKHUQGRQRUVWR
SUHVHQWDQDOWHUQDWLYHRŽHU

 $ZRUNLQJGHILQLWLRQ 1HYHUWKHOHVVYDOXHVPDWWHUJUHDWO\IRUGHILQLQJ


WKHVHLQWHUHVWVHVSHFLDOO\WRGD\DV:HVWHUQ
:KLOHUHDOLVWVDQGOLEHUDOVKDYHORQJDUJXHGRYHU VWDWHVSHUFHLYHGHPRFUDF\DQGIUHHGRPDV
ZKHWKHUGHYHORSPHQWDGYDQFHVJRDOVGHILQHGE\ EHLQJXQGHUVLHJH'HPRFUDWLFŒIULHQGVKRULQJœ
VWUDWHJLFQDWLRQDOLQWHUHVWVRUPRUDOYDOXHVZH of supply chains and trade linkages reflects this
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RXWFRPHV /DQFDVWHU9DQ'HU9HHQ :RUOH\E<HOOHQ 7RGD\D
*XOUDMDQLDQG&DOOHMD*XOUDMDQLDQG6LOFRFN FRPELQDWLRQRIGRQRUVœYDOXHVDQGLQWHUHVWV
 'HYHORSPHQWFRRSHUDWLRQZRXOGQHYHUEH LQIRUPVGRQRUVREMHFWLYHVIRUGHYHORSPHQW
SURYLGHGLILWZRUNHGDJDLQVWDFRXQWU\œVQDWLRQDO FRRSHUDWLRQ'HYHORSPHQWSRZHUEHFRPHVERWK
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be initiated. as the implicit or explicit use of an array of
development cooperation instruments for
increasing a state’s capabilities to achieve
desired outcomes in global policy.

 8SXQWLOWKHWZHQWLHWKFHQWXU\VWURQJVWDWHVKDGUDUHO\SURYLGHGRXWZDUGžQDQFLDODQGWHFKQRORJLFDOUHVRXUFHV
WRZHDNHUVWDWHVLQVWHDGWKH\W\SLFDOO\VRXJKWWULEXWHRUŒSURWHFWLRQœPRQH\IURPWKHP /XPVGDLQH 

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15 ODI Report

$ZLGHUGHILQLWLRQIRUWKLQNLQJDERXWWKHZD\V $ORQJVLGHWKHLQFHQWLYHVWRGRXEOHFRXQW2'$DUH
GHYHORSPHQWDQGSRZHULQWHUVHFWLVLPSRUWDQW escalating pressures to reduce aid budgets in real
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policy agendas.)RUH[DPSOH2'$LVLQFUHDVLQJO\ GHEWRYHUKDQJ,Q*HUPDQ\WKHDLGEXGJHW
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WKDQDGGLWLRQDOIXQGV +DWWOHDQG1RUGER  economic backdrop is compounded by populist
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,QWKH8.DLGLVQRZŒVRDNLQJXSFRVWVIURPDFURVV incompatible with addressing domestic economic
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Donors like Sweden and France are rebalancing WRGLYHUWLWWRZDUGVGHWHUULQJLUUHJXODUPLJUDWLRQ
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degrees of success).([FOXGLQJH[SHQGLWXUHVLQ 2'$SRWWKDWLVPHDQWWRVLWZLWKLQDODUJHU
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influence in the world.

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16 ODI Report

2.2 The development DQGREMHFWLYHVRIGHYHORSPHQWFRRSHUDWLRQ


power toolbox QHFHVVLWDWHVDODUJHUWRROER[LQFOXGLQJPRGDOLWLHV
associated with fostering economic partnerships,
2YHUWKHODVWGHFDGHWKHGHYHORSPHQWWRROER[ growing multilateral engagement and building
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LPSRUWDQFHRIFRQFHVVLRQDOILQDQFHLQDFKLHYLQJ FRQFHVVLRQDODLG )LJXUH 
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DQG,QGLDLQWKHODVWWKUHHGHFDGHV7KHVHWUHQGV FKDUDFWHULVWLFRIHDFKRIWKHVHOHYHUV)LJXUH
KDYHOHGWRDVKLIWLQIRFXVIRUGRQRUVIURPVLPSOH shows how financial modalities can be shaped by,
SRYHUW\UHGXFWLRQWRDEURDGHUUHPLWFHQWULQJ and deployed through, dynamics, arrangements
RQWKHFKDOOHQJHVRIJOREDOGHYHORSPHQW -DQXV DQGFDSDFLWLHVLQWHUQDOWRHDFKSURYLGHUQDWLRQ
.OLQJHELHODQG3DXOR+RUQHUDQG+XOPH 6HYHUDOIDFWRUVFRQWRXUDQGGHWHUPLQHWKH
+RUQHU  HIIHFWLYHSRZHURIWKLVILQDQFH7KH\LQFOXGH
the technical capacity represented by donor
 )RXUGHYHORSPHQWWRROV agencies and staff; the institutional channels
WKURXJKZKLFKJRYHUQPHQWVGLUHFWSXEOLF
7KHGHYHORSPHQWWRROER[FRQVLVWVRItools or finance and resources, and the autonomy of
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FRRSHUDWLRQILQDQFH$OOIRXUOHYHUVUHVWRQSXEOLF and the policies and regulations which in turn
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in multilateral organisations and a functioning regulations, institutional choices and allocations
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concessional resources to increase sources of technical instrument but are shaped by donor
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like climate change and global pandemic *DYDV*XOUDMDQLDQG+DUW*XOUDMDQL
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WKDWSXEOLFILQDQFHSOD\VLQWKHSURYLVLRQRI*3*V 7KXVthe cultivation of development power
7KLVZLGHQHGXQGHUVWDQGLQJRIWKHPHDQLQJ

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17 ODI Report

partly reflects how donors see themselves in WKHFKRVHQGHYHORSPHQWWRROLQGLYLGXDOO\DVZHOO


the world, and the resulting choices they make FROOHFWLYHO\ZLWKWKHRWKHUWRROVLQWKHWRROER[7KH
in support of that vision. DFKLHYHPHQWRIQDWLRQDOSROLF\REMHFWLYHVFDQDOVR
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critical causal mechanism lies in the latent power SRZHUFDSDELOLWLHV7RXQGHUVWDQGLIWKHUHDUHDQ\
FDSDELOLWLHV LGHQWLILHGLQ6HFWLRQ DFWLYDWHGE\ empirical grounds for a synergistic relationship

Figure 2 The development power toolbox

Bilateral aid
-ODA Grants or ODA loans

TIES OF FIN
DALI AN
MO CE
ICAL CAPAC Economic cooperation
CHN ITY
TE -ODA grants and loans
-OOF grants, loans and investments
NAL CH
UTIO AN
STIT NE
N
LS
I

ION AND
LAT PO
GU
LI
RE

CY

TIC POLIT
ES
M
IC
DO

Multilateral engagement
AL

-Contributions to core capital


-Earmarked funding
O
C

NF O
IG U R A TI

Global public goods


-ODA grants and loans
-Standalone vertical funds

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18 ODI Report

EHWZHHQWKHVHYDULDEOHVZHFRQGXFWHGD This suggest that some development tools


preliminary correlation analysis between our may be better placed to deliver certain kinds
IRXUGHYHORSPHQWLQVWUXPHQWVDQGIRXUSRZHU of national power ambitions7KHODUJHUFLUFOHV
LQGLFDWRUVDFURVVDOO'$&GRQRUV$IXOO indicate areas where there may be greater
discussion of our methods and the findings for this possibility for successful instrumentalisation, but
DQDO\VLVFDQEHIRXQGLQ$SSHQGL[ also where the risk of secondary harms is higher. In
WKHLQWHUYLHZVWKDWIROORZZHH[DPLQHDQGSUREH
:KLOHWKLVLVRQO\DQLQLWLDODQDO\VLVWKDWSUR[LHVHDFK these potential opportunities and risks more closely
YDULDEOHZLWKDVLQJOHLQGLFDWRUWKHODUJHUFLUFOHV LQIRXU(XURSHDQGRQRUFRQWH[WV
LQ)LJXUHQRQHWKHOHVVVKRZWKHSRVVLELOLW\IRU
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DJHQGDVHWWLQJSRZHUVDQGEHWZHHQPXOWLODWHUDO
LQYHVWPHQWVDQGSHUVXDVLYHPRUDODQGDJHQGD
setting power.

Figure 3 A model for cultivating development power

DEVELOPMENT POWER NATIONAL


LEVERS CAPABILITIES OBJECTIVES
Aid Coercive Values
Economic relations Persuasive Interests
Global Public Goods Agenda-setting
Multilateralism Moral

6RXUFH$XWKRUVœFRQFHSWXDOLVDWLRQ

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19 ODI Report

Figure 4 Correlations between power and development, 2015–2020

Coercive uas
Pers ive enda-settin Moral
Ag g

Number of Southern public


Military spending Average % of UN opinion of
destinations
as % of GDP voting alignment donors’ ‘influence’
accesible without visas
ODA

-0.239 0.164 0.249 -0.244


OOF

0.319 -0.121 0.362 -0.046


Core

0.07 0.162 -0.155 0.483

p-value
Multilateral
Eamarked

<0.001
-0.215 -0.033 0.22 -0.155

< 0.01
GPG

-0.217 0.209 0.312 -0.179

< 0.05

Key
0.4 0.3 02 0.1 0 -0.1 -0.2

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