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Title: The financial statecraft of debtors : the political economy of external finance in Africa
Author: Zeitz, Alexandra Olivia
ISNI:       0000 0004 7971 6502
Awarding Body: University of Oxford
Current Institution: University of Oxford
Date of Award: 2019
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How do countries' borrowing choices affect their foreign relations? More specifically, can access to new sources of external finance enhance countries' leverage when negotiating with their existing donors? This thesis investigates whether, and how, the greater diversity in African countries' portfolios of external finance in the 21st century has affected their negotiations with traditional donors and lenders. I focus specifically on the effects of Chinese lending and bond market finance, which have become the most important alternative to the development finance provided by traditional donor countries and development banks. I argue that alternative lenders act as an outside option that reduces borrowing governments' dependence on any one source of external finance, which ought to give them greater leverage in negotiations with their traditional donors. In this way, countries' borrowing choices become a basis for shaping their foreign relations, a phenomenon I refer to as the financial statecraft of debtors. However, not all countries are equally effective in translating their access to alternative finance into preferred negotiation outcomes. Both domestic political contestation in the recipient country and the significance of the recipient to donors shape variation in the success of debt-based financial statecraft. I adopt a mixed methods approach to support my argument. I use data on the terms of World Bank and US development finance to show that, across sub-Saharan African governments, access to alternative financing sources is associated with terms on traditional aid that are more aligned with government preferences. Three case studies based on extensive interview evidence --- Ethiopia, Kenya, and Ghana --- allow me to trace the mechanisms by which alternative finance affects negotiations with traditional donors and provide a comparison that demonstrates the conditioning effects of government and donor constraints. By explaining the potential benefits borrowing governments can derive from their portfolio of external finance, the thesis contributes to a better understanding of the international political economy of financial interdependence.
Supervisor: Ansell, Benjamin W. ; Oliveira, Ricardo Soares de Sponsor: Economic and Social Research Council
Qualification Name: Thesis (Ph.D.) Qualification Level: Doctoral
EThOS ID:  DOI: Not available
Keywords: International political economy