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41. China as an International Lender of Last Resort

Author:
Sebastian Horn, Bradley C. Parks, Carmen M. Reinhart, and Christoph Trebesch
Publication Date:
03-2023
Content Type:
Working Paper
Institution:
Kiel Institute for the World Economy (IfW)
Abstract:
This paper shows that China has launched a new global system for cross-border rescue lending to countries in debt distress. We build the first comprehensive dataset on China’s overseas bailouts between 2000 and 2021 and provide new insights into China’s growing role in the global financial system. A key finding is that the global swap line network put in place by the People’s Bank of China is increasingly used as a financial rescue mechanism, with more than USD 170 billion in liquidity support extended to crisis countries, including repeated rollovers of swaps coming due. The swaps bolster gross reserves and are mostly drawn by distressed countries with low liquidity ratios. In addition, we show that Chinese state-owned banks and enterprises have given out an additional USD 70 billion in rescue loans for balance of payments support. Taken together, China’s overseas bailouts correspond to more than 20 percent of total IMF lending over the past decade and bailout amounts are growing fast. However, China’s rescue loans differ from those of established international lenders of last resort in that they (i) are opaque, (ii) carry relatively high interest rates, and (iii) are almost exclusively targeted to debtors of China's Belt and Road Initiative. These findings have implications for the international financial and monetary architecture, which is becoming more multipolar, less institutionalized, and less transparent.
Topic:
Debt, Emerging Markets, International Trade and Finance, Financial Crisis, Belt and Road Initiative (BRI), and Sovereign Debt
Political Geography:
Africa, China, and Asia

42. Patterns of Global and Regional Value Chain Participation in the EAC

Author:
Sebastian Krantz
Publication Date:
02-2023
Content Type:
Working Paper
Institution:
Kiel Institute for the World Economy (IfW)
Abstract:
Using global Multi-Region Input-Output (MRIO) data from 2005-2015, this paper empirically investigates the extent and patterns by which East African Community (EAC) countries have integrated into Global Value Chains (GVCs) and Regional Value Chains (RVCs). Results imply that the foreign content of exports (I2E) and the share of exports being re-exported (E2R) are stably between 10% and 20% in most EAC countries. Trade in intermediates with the rest of the world remains 12-14 times greater in value-added (VA) terms than the trade in intermediates inside the EAC. During 2005-2015, Kenya expanded its role as a regional supplier of manufactured inputs (higher E2R with EAC partners), and Uganda slightly increased its agricultural input to the Kenyan and Rwandan food processing sectors. Overall, however, a downstream shift is evident, by which more VA (both domestic and foreign) is used for the production of final goods while maintaining high levels of exports in primary agriculture and mining. This shift goes alongside a loss of comparative advantage in manufacturing in all EAC countries apart from Kenya. Econometric analysis suggests that higher I2E and E2R shares increase GDP with an average elasticity of ≥ 0.25 over 2 years. Estimates for manufacturing sectors were slightly higher at elasticities ≥ 0.3 in response to E2R shifts. These results imply that policy measures to increase manufacturing competitiveness and promote more horizontal RVCs would benefit EAC economic growth in the medium run.
Topic:
Globalization, Regional Integration, and Global Value Chains
Political Geography:
Africa

43. Africa’s Businesswomen – Underfunded or Underperforming?

Author:
Charles Ackah, Holger Görg, Aoife Hanley, and Cecília Hornok
Publication Date:
03-2023
Content Type:
Working Paper
Institution:
Kiel Institute for the World Economy (IfW)
Abstract:
While the recent success of Africa’s ‘Lionesses’ – successful female entrepreneurs - is internationally celebrated, less is known about how liquidity can fuel the success of the ‘Lionesses’ and other businesswomen. Using information from a panel of over 800 male- and female-owned businesses in Ghana (ISSER-IGC survey), we capture a measure of underfunding, in addition to data on supplier credit, equity and other finance sources. Our regressions reveal a female-to-male productivity gap of between -11 to -19 percent, values similar to estimates for other African countries. However, when the relationship between gender and productivity is mediated by financial constraints, the gender performance gap disappears. Accordingly, female business-owners who indicate that funding is not a problem, are associated with higher productivity than males, all things equal. In a finding new to the literature, our regressions reveal the importance of supplier credit for Africa’s businesswomen.
Topic:
Globalization, International Trade and Finance, Women, Business, Productivity, and Liquidity
Political Geography:
Africa and Ghana

44. China’s Provinces as Global Actors: Evidence from China-Africa Relations

Author:
Charlotte Lenz
Publication Date:
01-2023
Content Type:
Working Paper
Institution:
LSE IDEAS
Abstract:
With the launch in the early 2000s of China’s ‘Going Global’ Strategy, Chinese provinces became one group of actors participating in China’s South-South relations. In this Strategic Update, Charlotte Lenz investigates the role of Chinese provinces as foreign policy actors and explains their internationalisation strategies, challenging the prevalent perception of China as a unitary actor on the world stage. Drawing on evidence from Africa-China relations, the report identifies two strategies employed by Chinese provinces in pursuit of their foreign policy interests: (1) Formal and informal “twinning” as a collaborative model between central and local actors, wherein central actors design policies and provincial governments execute projects; (2) and “clustering” according to a sectoral logic of investment and diplomacy in which a certain Chinese province engages a certain foreign country. Despite ongoing bureaucratic centralisation under Xi Jinping, provinces continue to pursue their own internationalisation strategies to help meet local economic and employment targets. Understanding their agency, interests and limitations is thus key to deriving a better understanding of China’s evolving global presence.
Topic:
Foreign Policy, Diplomacy, Bilateral Relations, Investment, and Internationalization
Political Geography:
Africa, China, and Asia

45. Growth Through Inclusion in South Africa

Author:
Ricardo Hausmann, Tim O'Brien, Andrés Fortunato, Alexia Lochmann, and Kishan Shah
Publication Date:
11-2023
Content Type:
Working Paper
Institution:
The John F. Kennedy School of Government at Harvard University
Abstract:
It is painfully clear that South Africa is performing poorly, exacerbating problems such as inequality and exclusion. The economy’s ability to create jobs is slowing, worsening South Africa’s extreme levels of unemployment and inequality. South Africans are deeply disappointed with social progress and dislike the direction where the country seems to be heading. Despite its enviable productive capabilities, the national economy is losing international competitiveness. As the economy staggers, South Africa faces deteriorating social indicators and declining levels of public satisfaction with the status quo. After 15 years, attempts to stimulate the economy through fiscal policy and to address exclusion through social grants have failed to achieve their goals. Instead, they have sacrificed the country's investment grade, increasing the cost of capital to the whole economy, with little social progress to show for it. The underlying capabilities to achieve sustained growth by leveraging the full capability of its people, companies, assets, and knowhow remain underutilized. Three decades after the end of apartheid, the economy is defined by stagnation and exclusion, and current strategies are not achieving inclusion and empowerment in practice. This report asks the question of why. Why is the economy growing far slower than any reasonable comparator countries? Why is exclusion so extraordinarily high, even after decades of various policies that have aimed to support socio-economic transformation? What would it take for South Africa to include more of its people, capabilities, assets, and ideas in the functioning of the economy, and why aren’t such actions being undertaken already? The Growth Lab has completed a deep diagnostic of potential causes of South Africa’s prolonged underperformance over a two-year research project. Building on the findings of nine papers and widespread collaboration with government, academics, business and NGOs, this report documents the project’s central findings. Bluntly speaking, the report finds that South Africa is not accomplishing its goals of inclusion, empowerment and transformation, and new strategies and instruments will be needed to do so. We found two broad classes of problems that undermine inclusive growth in the Rainbow Nation: collapsing state capacity and spatial exclusion.
Topic:
Inequality, Economic Growth, Unemployment, and Inclusion
Political Geography:
Africa and South Africa

46. Gold in Ghana: A Story of Unbalanced Exchange

Author:
Léonce Ndikumana and William Godfred Cantah
Publication Date:
09-2023
Content Type:
Working Paper
Institution:
Political Economy Research Institute (PERI), University of Massachusetts Amherst
Abstract:
his paper presents the historical and institutional context of the development of the gold sector in Ghana, which sets the stage for examining the contribution of the sector to the economy and its exposure to capital flight. The analysis sheds light on the important role that the regulatory framework and the fiscal regime that govern the gold sector have played in perpetuating a system of unequal distribution of gains from gold exploitation in terms of tax revenue and foreign exchange earnings in favour of foreign gold companies. The statistical analysis of gold export statistics reveals substantial discrepancies between Ghana’s gold exports and the recorded value of imports by its trading partners. These differences point to export underinvoicing as a conduit of capital flight, while also exhibiting a systematic lack of transparency and inconsistencies vis-a-vis established international conventions governing the recording of trade transactions, especially in the case of gold destined for South Africa which does not show up in the latter’s import statistics. Overall, the analysis suggests that the gains from the gold sector remain much below potential, but that at the same time there may be room for reforms that can improve the benefits from gold exploitation for the country.
Topic:
Development, Regulation, Capital Flight, Exchange Rates, and Gold
Political Geography:
Africa, South Africa, and Ghana

47. Cocoa in Ghana, the ‘Political Crop’: Does State Control Shield the Cocoa Sector from Exposure to Capital Flight?

Author:
Léonce Ndikumana and Kwame Adjai-Mantey
Publication Date:
08-2023
Content Type:
Working Paper
Institution:
Political Economy Research Institute (PERI), University of Massachusetts Amherst
Abstract:
Since its introduction into Ghana in the 19th century, cocoa has been considered a strategic crop, over which the post-independence governments have maintained substantial control. Cocoa is indeed referred to as a ‘political crop.’ The cocoa sector is closely regulated by the government through the Ghana Cocoa Board (COCOBOD). This paper aims to investigate whether this special industrial organization structure and the strict regulation help minimize the sector’s exposure to capital flight that would otherwise occur through export misinvoicing and leakage of foreign exchange earnings from cocoa exports. Indeed, compared to the gold sector in Ghana and the cocoa sector in neighboring Côte d’Ivoire, both of which are fully liberalized and dominated by foreign corporations, the cocoa sector in Ghana exhibits relatively little evidence of export misinvoicing. Moreover, cocoa export earnings are fully repatriated as they are in the hands of COCOBOD. The analysis, however, indicates that the gains from the cocoa sector in terms of contributions to GDP, tax revenue, and poverty reduction remain sub-optimal. This suggests that there is substantial room for improvement of these outcomes through targeted reforms and policy interventions at the sectoral level.
Topic:
Political Economy, Reform, Exports, Capital Flight, and Cocoa
Political Geography:
Africa and Ghana

48. Capital Flight from Natural Resource-Dependent African Countries: Updated Estimates and Analysis for the Cases of Cameroon, Ghana, and Zambia, 1970-2021

Author:
Léonce Ndikumana
Publication Date:
08-2023
Content Type:
Working Paper
Institution:
Political Economy Research Institute (PERI), University of Massachusetts Amherst
Abstract:
This paper is part of a project that investigates domestic and global drivers and enablers of capital flight from Cameroon, Ghana, and Zambia, three countries that are significantly endowed in natural resources. It presents estimates of capital flight from these three countries and discusses the key drivers of the phenomenon. The results show that as of 2021, estimated total capital flight stood at $71.1 billion for Cameroon, $50 billion for Ghana, and $71.5 billion for Zambia. External borrowing and, in the cases of Zambia and Cameroon, trade misinvoicing, are key correlates of capital flight. While external borrowing directly and indirectly drives capital flight, trade misinvoicing constitutes an important mechanism of unrecorded cross-border capital flows. This study contributes to the efforts to uncover the mechanisms and enablers of capital flight from Africa, with the aim of shedding light on possible strategies to curb further capital outflows in the context of efforts to scale up and diversify development financing to support recovery from global crises, the transition to green growth, and sustainable development in Africa.
Topic:
Development, Political Economy, Natural Resources, Capital Flight, and Trade
Political Geography:
Africa, Zambia, Ghana, and Cameroon

49. Tunisian society finds itself stuck in silence and limbo post-July 25

Author:
Zied Boussen
Publication Date:
01-2022
Content Type:
Working Paper
Institution:
Arab Reform Initiative (ARI)
Abstract:
On 25 July 2021, Tunisian President Kais Saied announced a state of emergency for the country, along with drastic measures against what he considered to be a degradation of the State. Through an in-depth analysis of the current situation, this paper explores a so-far silent civil society and examines the political and social dynamics that will lead to a chasm between these actors and the public they are expected to mobilize.
Topic:
Civil Society, Social Movement, Political Activism, and Reform
Political Geography:
Africa and Tunisia

50. Why Tunisia’s parliamentary electoral formula needs to be changed

Author:
Alexander Martin and John Carey
Publication Date:
01-2022
Content Type:
Working Paper
Institution:
Arab Reform Initiative (ARI)
Abstract:
In light of the current political situation in Tunisia, this paper suggests that to avoid producing fragmented parliaments, the Tunisian electoral law should be amended and the Hare Quota-Largest Remainders (HQLR) formula should be replaced. A switch to either the D’Hondt or St.Lague divisors formulas would produce clearer winners and losers and foster accountability while preserving the proportional representation (PR) system.
Topic:
Elections, Democracy, Legislation, and Parliament
Political Geography:
Africa and Tunisia

51. Marine pollution: A growing concern for the southern suburb of Tunis

Author:
Khouloud Ayari
Publication Date:
01-2022
Content Type:
Working Paper
Institution:
Arab Reform Initiative (ARI)
Abstract:
The National Sanitation Utility (ONAS) organized a public consultation two months after a human chain demonstration took place on 12 September along the beaches of the southern suburb of Tunis. This article examines the timeline of events that took place to warn against sea degradation from 2013 until September 2021. It also provides feedback on the November 2021 public consultation, and offers insight into the current environmental issues at hand in both local and national contexts.
Topic:
Climate Change, Environment, Maritime, and Pollution
Political Geography:
Africa and Tunisia

52. Tunisia: Youth take a stand for/against the president’s decisions and watch in limbo

Author:
Alessandra Bajec
Publication Date:
02-2022
Content Type:
Working Paper
Institution:
Arab Reform Initiative (ARI)
Abstract:
After playing a key role in the 2011 revolution, most young Tunisians have grown fed up with politicians in their country as a result of successive political, economic and social failures that marred the democratic transition. Since the mass protests on 25 July 2021 that preceded President Saied’s power grab, a popular youth movement has reawakened to demand radical change. This paper looks at some of the diverging positions held by young Tunisians on the president’s actions, their hopes and concerns in the current phase of political turbulence.
Topic:
Social Movement, Youth, Participation, and Mobilization
Political Geography:
Africa and Tunisia

53. Mapping state capacity in Africa: Professionalism and reach

Author:
Matthias Krönke, Robert Mattes, and Vinothan Naidoo
Publication Date:
01-2022
Content Type:
Working Paper
Institution:
Afrobarometer
Abstract:
Whether depicted as bloated, extractive, or remote from the lives of ordinary citizens, the African state is widely seen to lack the necessary capacity to provide for the physical and material security of its citizens or to command legitimacy. Yet scholars have rarely attempted to assess the performance of the African state through the prism of the lived experiences of those whom the state is meant to serve – its citizens. Most studies rely on data supplied by national statistics agencies or the judgments of expert observers. And while scholars acknowledge that the quality of the African state is likely shaped by geographic and ethnic differences within countries, few have measured how state capacity varies at the sub-national level. In this paper, we address this situation by using survey research measures of respondents’ proximity to state services and actual experiences with civil servants to measure two distinct dimensions of the state salient to the African context: its reach, or physical presence at the grassroots across the breadth of a country, and its professionalism, or ability to deliver public services in a proficient and ethical manner. The results reveal new perspectives on which states excel on either or both dimensions. They also illustrate how widely state performance varies at the sub-national level. Finally, we use survey data to assess the performance of the state, and show that it is the degree of professionalism, and sometimes reach, that enables the state to provide security and welfare, satisfy demands, and secure popular legitimacy. But in contrast to usual expectations, the size of the state at senior levels has no impact.
Topic:
Nationalism, State Formation, State Building, Professionalism, and Subnationalism
Political Geography:
Africa

54. Footing the bill? Less legitimacy, more avoidance mark African views on taxation

Author:
Thomas Isbell
Publication Date:
02-2022
Content Type:
Working Paper
Institution:
Afrobarometer
Abstract:
Taxation is a key fiscal tool for domestic resource mobilization. In many African countries, however, weak tax-administration systems limit the ways in which governments can finance their development agendas and provide essential services such as health care, education, and infrastructure (Drummond, Daal, Srivastava, & Oliveira, 2012). The importance of raising resources through taxation has been heightened by the COVID-19 pandemic. Governments globally have confronted a sudden drop in tax revenue as many economic sectors have slowed amid lockdowns. Especially in developing countries, this shock has significantly curtailed governments’ ability to fund access to vital health, financial, and other services and assistance to those most affected by the pandemic (Gaspar, Hanif, Pazarbasioglu, & Saint-Amans, 2020). The reduction in tax revenue during the pandemic is likely to compound itself over time and limit how quickly developing economies can bounce back as governments lack the fiscal resources to stimulate growth. Even without a pandemic, tax revenues are relatively low across Africa. In 2019, 30 African countries averaged tax revenues totaling 16.6% of gross domestic product – half the 33.8% collected by member countries of the Organisation for Economic Co-operation and Development (OECD/AUC/ATAF, 2021). In addition to capacity limitations of government tax agencies, low tax revenues can be related to macroeconomic factors such as large agricultural and informal sectors, which are typically hard to tax (Di John, 2006; Mansour & Keen, 2009; Coulibaly & Gandhi, 2018; Moore, Prichard, & Fjeldstad, 2018). One current debate concerns how to tax highly digitalized businesses – which operate in African countries without necessarily having an easily taxable physical presence – in a way that is fair and doesn’t impede the growth of start-up companies (African Tax Administration Forum, 2020). But low tax revenues can also reflect micro-level factors such as citizens’ limited willingness to pay taxes (“tax morale”), a lack of knowledge about what they owe and what their taxes are used for, and their perceptions of corruption in the tax administration (OECD, 2019). If citizens regard paying taxes as a fiscal exchange or contractual relationship (Moore, 2004), these factors can affect the perceived legitimacy of taxation as a whole (D’Arcy, 2011). Beyond short- and medium-term fiscal problems, this can also have a more fundamental impact on the legitimacy of governments and political systems. The ability to raise revenue through taxes is an important marker of state capacity and political legitimacy (Brautigam, Fjeldstad, & Moore, 2008), and may contribute to government responsiveness and accountability as taxpayers demand a return on their taxes (Moore et al., 2018). How do Africans see taxation? Afrobarometer survey data collected in 34 African countries in 2019/2021 show that a majority of Africans endorse their government’s right to collect taxes. But popular support for taxation has weakened over the past decade while perceptions that people often avoid paying their taxes have increased sharply. Moreover, many Africans question the fairness of their country’s tax burden, and only half think their government is using tax revenue for the well-being of its citizens. While a majority would pay higher taxes to support young people and national development, most say they find it difficult to get information about tax requirements and uses, and many see tax officials as corrupt and untrustworthy. Such perceptions may play a role in how willingly citizens support – and comply with – their government’s tax administration.
Topic:
Political stability, Tax Systems, Legitimacy, and State Funding
Political Geography:
Africa

55. Broad support for multiparty elections, little faith in electoral institutions: Uganda in comparative perspective

Author:
Matthias Krönke
Publication Date:
02-2022
Content Type:
Working Paper
Institution:
Afrobarometer
Abstract:
In the run-up to Uganda’s 2021 election, in which President Yoweri Museveni defeated Kyagulanyi Ssentamu, aka Bobi Wine, to claim a sixth term, violence reached unprecedented levels. More than 50 people were killed as security forces broke up opposition party gatherings, and several opposition members were arbitrarily detained (Arinaitwe, 2021). Although Election Day, 14 January, was relatively peaceful, more than 17.5 million Ugandans experienced a multiday Internet blackout, making social media platforms and news websites inaccessible at a time when they were in high demand (BBC, 2021; Moffat & Bennett, 2021). Election observers from the East African Community (EAC) noted malfunctioning biometric voter-verification machines and delays in the delivery of voting materials, among other issues, but joined domestic observers from the Citizens’ Coalition for Electoral Democracy in Uganda in labeling the election largely free and fair. The Electoral Commission (EC) ultimately declared Museveni the winner with 58% of the vote – a comfortable lead over Bobi Wine (35%) and his fellow challengers (Moffat & Bennett, 2021; Yiga, 2021). Wine initially filed a court challenge in which he complained of soldiers stuffing ballot boxes, casting ballots for people, and chasing voters away from polling stations, but he later withdrew the case (Muhumuza, 2021). Court challenges after elections are commonplace in Uganda; since the country’s adoption of the fourth constitution in 1995, the outcome of every presidential race except the 2011 poll has been contested in court. Yet the courts have never overturned the results, even when they have acknowledged irregularities (Atuhaire, 2021). Beyond Museveni’s victory, what are the implications of the 2021 election for a country that returned to multiparty competition just 15 years ago? Should Ugandans be enthusiastic about a strong opposition showing as a sign of a healthy democracy at work, or will the prospect of enduring National Resistance Movement rule lead to disillusionment with democracy and the institutions that are meant to safeguard it – the EC and the courts? This policy paper aims to place the events of the 2021 election in perspective by examining public opinion data from Uganda over the past two decades. Despite a decade-long slide in Ugandans’ satisfaction with democracy, this analysis supports previous findings that more and more citizens have become “committed democrats” and view multiparty elections as tools for holding non-performing leaders accountable (Isbell & Kibirige, 2017; Kakumba, 2020; Kibirige, 2018). However, this investigation also points to decreasing trust in institutions that are meant to enforce the most basic of democratic processes – free and fair elections. Importantly, this negative trend cuts across the partisan divide. The analysis also shows that EC performance – both in executing its technical tasks and in refereeing fairly between competing parties – plays a crucial role in citizens’ evaluations of election quality. While public debate about reforming the EC is not new (Kibirige, 2016), the events of the 2021 election may provide impetus for intensifying efforts to increase transparency and improve communication on the part of the commission in order to enhance citizens’ satisfaction with the electoral process.
Topic:
Elections, Multi Party System, Partisanship, and Electoral Systems
Political Geography:
Uganda and Africa

56. Sign of the Times: How the United Kingdom’s Integrated Review Affects Relations with Africa

Author:
Zainab Usman and Jonathan Glennie
Publication Date:
02-2022
Content Type:
Working Paper
Institution:
Carnegie Endowment for International Peace
Abstract:
In March 2021, the British government published a vision document: “Global Britain in a Competitive Age: The Integrated Review of Security, Defence, Development and Foreign Policy.”1 Previously, the government had issued documents on security, defense, development, or foreign policy, but this integrated review bundled together all aspects of policy related to a vision of a so-called Global Britain. This newly integrated approach to policymaking mirrors a strategic consolidation within the UK government, specifically the merger of the Department for International Development (DFID) with the Foreign and Commonwealth Office to become a new Foreign, Commonwealth and Development Office (FCDO). While the review is framed as a necessary response to a changing global landscape, domestic political considerations around the British exit from the European Union (Brexit) weigh heavily. The review also points to the current UK government’s inclination to prize geopolitical competition over a previous emphasis on global cooperation. Steep cuts to the UK’s generous foreign aid budget as well as the abolition of DFID have already drawn significant academic, policy, and media attention. Yet these actions are part of a broader UK strategy to redefine the country’s relations to the rest of the world, with significant implications beyond the controversial foreign aid cuts for poor countries, including those in Africa. The review will shape relations with a continent that has deep historical ties from the colonial era, a large diasporic presence, and long-standing economic relations with the UK. This analysis draws out the implications of the UK’s 2021 integrated review for African countries and recommends next steps for African and other international stakeholders to navigate the UK’s overhauled external relations strategy.
Topic:
Security, Foreign Policy, Defense Policy, Development, and Integration
Political Geography:
Africa and United Kingdom

57. Negotiating Local Business Practices With China in Benin

Author:
Folashade Soule
Publication Date:
04-2022
Content Type:
Working Paper
Institution:
Carnegie Endowment for International Peace
Abstract:
Commercial negotiations between Benin and China demonstrate how both sides navigate the dynamics of Africa-China business-to-business relationships. In Benin, Chinese and local Beninese officials engaged in drawn-out negotiations on a deal to construct a business center aimed at deepening business links between Chinese and Beninese merchants. Strategically located in Cotonou, Benin’s principal economic city, the center aims to promote investment and wholesale businesses by serving as a hub for China’s business-to-business relations not just in Benin but regionally in West Africa, especially in the large and growing neighboring market of Nigeria. This paper relies on original research and fieldwork conducted in Benin from 2015 to 2021 and the author’s access to draft and final contracts from the negotiations, which allow for a side-by-side comparative textual analysis, as well as initial field interviews and follow-up interviews with key negotiators, Beninese businessmen, and former Beninese students in China. The paper shows how Chinese and Beninese authorities negotiated the establishment of the center and, above all, how Beninese authorities made Chinese negotiators adapt to local Beninese labor, construction, and legal norms and put pressure on their Chinese counterparts. This strategy meant that negotiations took longer than usual to complete. China-Africa cooperation is often characterized by speedy negotiations, an approach that in some cases turns out to be harmful—since this can allow vague and unfair clauses to be featured in final contracts. The negotiations over the Chinese business center in Benin is a good example of how well-coordinated negotiators that take their time and work in coordination with various counterparts throughout the government can help facilitate better outcomes in terms of high-quality infrastructure and compliance with prevailing construction, labor, environmental, and business norms, while also preserving a good bilateral relationship with China.
Topic:
Foreign Policy, Development, Bilateral Relations, and Business
Political Geography:
Africa, China, Asia, and Benin

58. How Inequality and Polarization Interact: America’s Challenges Through a South African Lens

Author:
Brian Levy
Publication Date:
04-2022
Content Type:
Working Paper
Institution:
Carnegie Endowment for International Peace
Abstract:
Over the past decade, toxic interactions between persistent inequality, racial tensions, and political polarization have undercut the promise of South Africa’s so-called rainbow miracle transition from apartheid to democracy. South Africa’s recent history sheds light on the United States’ recent political travails. It illustrates how interactions between inclusion and inequality on the one hand and political ideas and entrepreneurship on the other can fuel positive spirals of hope, economic dynamism, and political legitimacy—but can also trigger vicious, downward spirals of disillusion, anger, and political polarization. South Africa was able to transition from a society structured around racial oppression into a nonracial democracy whose new government promised “a better life for all.” Especially remarkable was the speed with which one set of national ideas appeared to give way to its polar opposite. From a society marked by racial dominance and oppression, there emerged the aspiration to build an inclusive, cooperative social order, underpinned by the principles of equal dignity and shared citizenship. In the initial glow of transition, South Africa’s citizens could hope for a better life for themselves and their children. In time, though, the promise wore thin. It became increasingly evident that the economic deck would continue to be stacked, and that the possibility of upward mobility would remain quite limited. Fueled by massive continuing inequities in wealth, income, and opportunity, South Africans increasingly turned from hope to anger. In the United States, a steady and equitably growing economy and a vibrant civil rights movement had fostered the hope of social and economic inclusion. But that hope turned to anger as the benefits of growth became increasingly skewed from the 1980s onward. In 2019, the U.S. economy was more unequal than it had been since the 1920s. Younger generations could no longer expect that their lives would be better than those of their parents. Such economic adversity and associated status anxiety can trigger a heightened propensity for us-versus-them ways of engaging the world. In both South Africa and the United States, polarization was fueled by divisive political entrepreneurs, and in both countries, these entrepreneurs leveraged inequality in ways that added fuel to the fire. In the 2010s, South Africa went through a new ideational reckoning, in part to correct the view that the transition to democracy had washed the country’s apartheid history clean. But opportunistic political entrepreneurs also pushed an increasingly polarized and re-racialized political discourse and pressure on public institutions, with predictable economic consequences. South Africa’s economy slid into sustained stagnation. Paralleling South Africa, America’s divisive political entrepreneurs also cultivated an us-versus-them divisiveness. However, unlike in South Africa, political entrepreneurs and economic elites in the United States also used divisive rhetoric as a way to persuade voters to embrace inequality-increasing policies that might otherwise not have won support. By the late 2010s, the risks were palpable in both South Africa and the United States of an accelerating breakdown of the norms and institutions that sustain inclusive political settlements. For South Africa, the reversals were not wholly unexpected, given the country’s difficult inheritance—though a recent turn away from angry populism suggests that, paradoxically, the rawness and recency of the anti-apartheid struggle and triumph might perhaps offer some immunization against a further-accelerating a downward spiral. But for the United States, the converse may be true. Increases in inequality since the 1980s, and their attendant social and political consequences, have been largely self-inflicted wounds. Complacency bred of long stability may, for decades, have been lulling the country into political recklessness at the inequality-ethnicity intersection, a recklessness that risks plunging the country into disaster. But this paper’s analysis is not all gloom and doom. South Africa’s escape from the shackles of apartheid teaches that, even in the most unlikely settings, downward spirals of despair and anger can transmute into virtuous spirals of hope. The country’s first fifteen years of democracy also show that, once a commitment to change has taken hold, making the shift to an inclusion-supporting economy is less daunting than it might seem. Reforms that foster “good enough inclusion” can be enough to provide initial momentum, with the changes themselves unfolding over time—and an initial round of change can bring in its wake a variety of positive knock-on effects. But lessons can be overlearned. Mass political mobilization was pivotal to South Africa’s shaking loose the shackles of apartheid—and new calls to the barricades might seem to be the obvious response to current political and governmental dysfunction. However, different times and different challenges call for different responses. In both contemporary South Africa and contemporary America, the frontier challenge is not to overthrow an unjust political order but to renew preexisting formal commitments to the idea that citizenship implies some shared purpose. Renewal of this kind might best be realized not by confrontation but rather by a social movement centered around a vision of shared citizenship, a movement that views cooperation in pursuit of win-win possibilities not as weakness but as the key to the sustainability of thriving, open, and inclusive societies.
Topic:
Governance, Democracy, Inequality, Institutions, and Polarization
Political Geography:
Africa, South Africa, North America, and United States of America

59. Defying United Nations Sanctions: Three Reasons for African Engagement with North Korea

Author:
Tycho van der Hoog
Publication Date:
06-2022
Content Type:
Working Paper
Institution:
Korea Economic Institute of America (KEI)
Abstract:
The United Nations (UN) sanctions against North Korea are weakened by structural evasion techniques and weak enforcement. The African continent is a crucial node in the global illicit networks of North Korea. This paper examines three motives for African states to cooperate with North Korea, with a particular focus on the context of southern Africa: historical affinity (reciprocity), the practical issue of maintenance dependency (necessity), and the presence of weak enforcement regimes (opportunity). Based on a deep reading of UN Panel of Experts reports, academic literature and policy papers, novel archival material, and an interview with a defected North Korean diplomat, this paper argues that solutions to strengthen the sanctions regime can be successful only if they are grounded in African initiatives.
Topic:
Security, Economics, United Nations, and Sanctions
Political Geography:
Africa, Asia, and North Korea

60. Weathering shocks: the effects of weather shocks on farm input use in sub-Saharan Africa

Author:
Aimable Nsabimana
Publication Date:
05-2022
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
: There has been much discussion on climate change and its adverse effects on agriculture, including excessive loss of food production. In regions such as sub-Saharan Africa, where agriculture is the major source of household livelihoods, shocks in weather patterns affect farmers’ expectations of farm yield and hence the decision to adopt farm inputs such as fertilizers and pesticides and the extent of their utilization, particularly given the relatively high cost of these inputs. In this study, I explore the relationship between weather shocks and the intensity of inputs use at the plot level using large-scale national panel data from three African countries: Niger, Nigeria, and Tanzania. By combining monthly drought index data with a rich Living Standards Measurement Study-Integrated Surveys on Agriculture dataset, I find that the intensity of chemical fertilizer use reduces much more in drought-prone areas than in less drought-prone areas during growing seasons. I also find that drought during lean seasons is associated with higher pesticide uptake. The evidence suggests that drought induces farmers to purposively reduce farm investments, including yield-enhancing technology such as chemical fertilizer, hence worsening adverse farm yield effects.
Topic:
Agriculture, Climate Change, Food Security, Weather, and Chemical Fertilizer
Political Geography:
Africa and Sub-Saharan Africa