China in Uganda: Changing Conditions for Conditionality? An empirical analysis of how Danish, EU and Chinese Development Aid differ, especially in regards to Conditionality.

Start date: 17 March, 2012 End date: 28 April, 2012 Project type: Master's Thesis (prior to 2018) Project code: A16973 Countries: Uganda Institutions: University of Copenhagen (UCPH), Denmark Grant recipient: Rinie Trap Total grant: 13,000 DKK


It is a common (mis)perception that emerging donors such as China provide unconditional aid with “no strings attached”, thereby undermining the development efforts of traditional donors, hindering economic development and exacerbating human rights abuses. 
However, little is currently known about China’s development aid and the implied implications for conditionalities. A systematic review of the existing literature concerning emerging donors and conditionalities revealed few empirically and theoretically substantiated studies. Therefore, the objective of this thesis is to contribute to the limited literature concerning Chinese development aid and conditionalities. The thesis does so by answering the following research question: “How does Danish, European (EU) and Chinese development aid differ, especially in regards to conditionalities, and to what extent has the increasing presence of Chinese aid in the case of Uganda affected the traditional donors’ ability to set (political) conditions through the provision of aid?”
In order to answer the research question a comparative analysis of Chinese, EU and Danish development aid, followed by an analysis of the implications of Chinese aid on traditional donors’ ability to set conditions is undertaken based on a theoretical framework, which is developed with outset in the Principle-Agent theory and factors identified by previous studies as influencing conditionality efficacy. The study is designed as a qualitative study and builds on 20 interviews conducted with relevant stakeholders representing the donor countries and the recipient.
The analyses point to several conclusions. First of all, major differences exist between traditional and Chinese aid in regards to aid volume, rationale, modality, provision and conditions. Secondly, despite the growing Chinese aid, the following point is raised; that China’s development aid thus far, does not represent as great a threat to the traditional donors’ ability to set conditions as many scholars have asserted. First and foremost, due to the relative small size of China’s aid along with the modality and focus, Chinese development assistance is not viewed as a viable alternative to traditional aid, but rather a complement. Secondly, in the recipient’s view, donor influence is not just a matter of dollars and cents, but also international political clout. Finally, it is not a matter of either or. The recipient would, at any given time, prefer to have more sources of aid, rather than few. Thus, the traditional donors still represent important partners to the recipient and thus maintain the ability to set political conditions.
An emerging competition is undoubtedly in motion, but clearly China has yet to displace Uganda’s most established donors.
My conclusions therefore, point towards a need for traditional donors to engage in strategic partnerships with emerging actors such as China, both in order to maintain influence in the recipient country, but also to achieve the best possible development results by combining the donors’ different expertise and strengths to create a “win-win-win” tri-partnership for the benefit of donors and recipients alike.