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How is Changing Demand for Multilateral Lending Impacting Development Finance Activity in Africa?

English title How is Changing Demand for Multilateral Lending Impacting Development Finance Activity in Africa?
Applicant Michaelowa Katharina
Number 156162
Funding scheme Project funding (Div. I-III)
Research institution Institut für Politikwissenschaft Universität Zürich
Institution of higher education University of Zurich - ZH
Main discipline Economics
Start/End 01.03.2015 - 31.08.2017
Approved amount 132'502.00
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All Disciplines (2)

Discipline
Economics
Political science

Keywords (7)

World Bank; Bilateral; multilateral; PTA Bank; China; African Development Bank; development

Lay Summary (German)

Lead
Multilaterale Entwicklungsbanken stehen vor einem sich schnell verändernden Kontext für ihre Tätigkeit, wie der steigenden Wirtschaftskraft vieler Entwicklungsländer und einem dramatischen Anstieg der Finanzströme. Die Wirkung dieser dramatischen Verschiebung der weltwirtschaftlichen Lage auf multilaterale Entwicklungsbanken ist von erheblicher Bedeutung für eine wirksame Entwicklungszusammenarbeit.
Lay summary
Dieses Forschungsprojekt recherchiert inwiefern sich die neuen Realitäten der Weltwirtschaft auf die Operationen der multilateralen Entwicklungsbanken in Afrika auswirken. Obwohl Afrika die ärmste Region der Welt ist, wachsen viele afrikanische Länder wegen einer Rohstoffpreissteigerung und steigender Investitionen sehr schnell.

Haben die stärkere Wirtschaft und Kreditaufnahme Optionen eine Wirkung auf die Nachfrage nach MDB Dienstleistungen in Afrika, und wenn ja, in welcher Hinsicht? Man kann sich vorstellen, dass eine MDB weniger Hebelwirkung haben würde, um eine bestimmte Entwicklungsvision unter diesen Umständen erzwingen zu können. Eine Regierung mit alternativen Finanzoptionen könnte zum Beispiel restriktive ökologische oder soziale Bedingunen ablehnen.

Ziel dieses Projekts ist es zu untersuchen, wie diese neue Dynamik auf der Ebene des Kontinents und in bestimmten Länder  in drei verschiedenen multilateralen Banken: der Weltbank, der Afrikanischen Entwicklungsbank (AfDB ) und der östlichen und südlichen Afrika Handels- und Entwicklungsbank (PTA Bank), spielt. Die übergreifende Hypothese des Forschungsprojektes ist, dass i) die unterschiedlichen wirtschaftlichen Umstände in Entwicklunsländer und ii) die unterschiedlichen Governance-Strukturen der multilateralen Entwicklungsbanken zwei wichtigen Variablen sind, die Variationen in Aspekten der MDB Operationen erklären kann.

Dieses Projekt will aufzeigen, wie die sich im Wandel befindende Weltwirtschaft eine Neugestaltung multilateraler Entwicklungsaktivitäten in Afrika erzeugt. Dazu gehört nicht nur die Gesamtentwicklungsfinanzierung, sondern auch die Wirkung auf sektorspezifische Projekte und Policy-basierte Kreditgewährung. Diese Themen sind von grosser Bedeutung nicht nur für die Wissenschaft, sondern auch für den breiteren Entwicklungssektor, einschließlich multilateralen Entwicklungsbanken, bilateralen Gebern und Nichtregierungsorganisationen.

Direct link to Lay Summary Last update: 08.05.2015

Responsible applicant and co-applicants

Employees

Publications

Publication
China in Africa: Competition for traditional development finance institutions?
Humphrey Chris, Michaelowa Katharina (2019), China in Africa: Competition for traditional development finance institutions?, in World Development, 120, 15-28.
‘Minilateral’ Development Banks: What the Rise of Africa's Trade and Development Bank says about Multilateral Governance
Humphrey Chris (2019), ‘Minilateral’ Development Banks: What the Rise of Africa's Trade and Development Bank says about Multilateral Governance, in Development and Change, 50(1), 164-190.

Datasets

China MDBs Africa

Author Humphrey, Chris; Michaelowa, Katharina
Publication date 04.06.2019
Persistent Identifier (PID) 10.17632/gptf595dwf.1
Repository Mendeley data, v1
Abstract
Replication data for associated article

Collaboration

Group / person Country
Types of collaboration
Carlos Mollinedo, African Development Bank Tunisia (Africa)
- in-depth/constructive exchanges on approaches, methods or results
- Industry/business/other use-inspired collaboration
Dr. Marcelo Giugale, World Bank Africa United States of America (North America)
- in-depth/constructive exchanges on approaches, methods or results
- Industry/business/other use-inspired collaboration
Dr. Christopher Kilby, Villanova University United States of America (North America)
- in-depth/constructive exchanges on approaches, methods or results
- Publication
Dr. Amar Bhattacharya, G24 United States of America (North America)
- in-depth/constructive exchanges on approaches, methods or results
- Publication

Scientific events

Active participation

Title Type of contribution Title of article or contribution Date Place Persons involved
Special session of masters course "Development Finance: Emerging Challenges and Governance" at Institut Barcelona Estudis Internacionals Individual talk ‘Minilateral’ Development Banks: What the Rise of Africa’s Trade and Development Bank says about Multilateral Governance 18.03.2019 Institut Barcelona Estudis Internacionals, Barcelona, Spain Humphrey Christopher;
German Economic Association, Annual Conference "Development Economics and Policy 2018" Talk given at a conference China in Africa: Competition for traditional development finance institutions? 28.06.2018 Zurich, Switzerland Michaelowa Katharina;
Political Economy of International Organizations Conference Poster China in Africa: Competition for “Traditional” Development Finance Institutions? 08.02.2018 Madison Wisconson, United States of America Michaelowa Katharina;
Swiss Political Science Association Annual Conference Talk given at a conference China in Africa: Competition for Traditional Development Finance Institutions? 05.02.2018 Geneva, Switzerland Michaelowa Katharina; Humphrey Christopher;
Special session of masters course "The Political Economy of Regional Development Banks at University of St. Gallen Individual talk ‘Minilateral’ Development Banks: What the Rise of Africa’s Trade and Development Bank says about Multilateral Governance 29.11.2017 University of St. Gallen, Switzerland Humphrey Christopher;
Beyond Bretton Woods: Complementarity and Competition in the International Economic Order Talk given at a conference Minilateral” Development Banks: What the Rise of Africa’s Trade and Development Bank (TDB) Says About Multilateral Governance 14.09.2017 Boston University, United States of America Humphrey Christopher;


Knowledge transfer events

Active participation

Title Type of contribution Date Place Persons involved
TDB Bank Annual Board of Governors Meeting Talk 30.08.2017 Savoy Conference Center, Mahe, Seychelles Humphrey Christopher;
Roundtable Discussion on Regional Development Banks Workshop 07.11.2016 Overseas Development Institute, Great Britain and Northern Ireland Humphrey Christopher;


Associated projects

Number Title Start Funding scheme
137753 Competing to Survive? The Impact of Global Economic Change on the World Bank and Other MDBs 01.01.2012 Project funding (Div. I-III)

Abstract

Multilateral development banks are facing a rapidly changing context for their activities, driven by the rising economic strength of many low and middle-income countries and a dramatic increase in alternative sources of financial flows to the developing world. For example, public debt among developing countries represented on average only 40% of GDP in 2010 and was expected to decline to 30% by 2015 (IMF 2011), while the non-OECD share of total global foreign exchange reserves rose from below 30% in 1990 to about 65% in 2010 (Reisen, 2013). How has this dramatic shift in global economic conditions affected the development activities of MDBs? This is of considerable importance to effective development cooperation, but as yet has been little analyzed in academia.This proposed research project seeks to better understand how the new realities of the global economy are impacting multilateral development bank (MDB) operations in Africa. As the poorest region of the world (over 47% of population living on less than US$1.25 per day; World Bank, 2012), Africa is of particular interest to international development research and practice. At the same time, the economies of many African countries are growing very quickly, fueled largely by commodity price booms. Sub-Saharan Africa currently has the highest growth rates of any region in the world outside of developing Asian countries (5.6% in 2013; IMF 2013). With low debt levels and major investment plans, many governments are borrowing heavily from new bilaterals flooding into the region (US$75 billion in official Chinese financing between 2000 and 2011 ; Strange et al., 2013)-and raising money on capital markets. Has the fact that a number of developing countries have stronger economies and more borrowing options affected the demand for MDB services in Africa, and if so, in what ways? One can imagine that an MDB’s leverage to impose a particular vision of development policies and activities is greatly reduced in these circumstances. A government with alternative options for finance might prefer to allocate development investment resources within its country for reasons other than strictly poverty reduction criteria, for example. It may also be less inclined to agree to unpleasant policy conditions as part of a budget support loan, or to submit to highly restrictive environmental, social and procurement safeguards required by some MDBs along with infrastructure investment projects. This project intends to explore how these new dynamics are playing out at the level of the continent as a whole and within a sub-set of country cases, across three different multilateral banks: the World Bank, the African Development Bank (AfDB) and the Eastern and Southern African Trade and Development Bank (PTA Bank). The overarching hypothesis of the research project is that i) changing economic conditions among borrower governments and ii) differing governance structures of MDBs are two critically important independent variables that can explain variations in aspects of MDB operations.
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