Introduction
For a long time, western countries have dominated the development agenda in low-income countries. Their most significant contribution to the social and economic development of these nations has been direct financial assistance. However, most of the countries that have employed western economic policies have not made significant progress by using this model. Consequently, researchers have had numerous debates about the impact of western economic policies on the economic goals of developing countries (Bayliss & Van Waeyenberge 2018). Part of the conversation has been that western experts have not helped low-income countries achieve their development goals, while some critics argue that these countries would not have “survived” without western intervention (Gnangnon 2014; Der Ploeg & Poelhekke 2017; Urbain, Mallaye & Araar 2017). Recently, the debate has shifted to the analysis of the impact of Chinese exports on the social and economic development of low-income countries.
Indeed, China is deemed to have a presence in many developing nations and is associated with their economic activities as well as their extraction of natural resources (Van Der Ploeg & Poelhekke 2017). Engaged in projects like building roads from inland areas to the coast, constructing railway lines from ports to cities, rehabilitating highways at affordable costs, and planning several real estate developments, the Chinese have made their presence known in many developing economies. However, the effects of their activities in these economies have not been holistically understood because few studies have investigated whether they will do a better job than western experts, or not.
This paper makes a case for Chinese experts by demonstrating that western countries have done more harm than good in low-income countries and the Chinese will do a better job in helping these nations to meet their social and economic goals. Evidence to support this point of view will be explained in three phases. The first one contains information showing the failure of western economic policies in developing nations and the second one explains why the Chinese policies will work. The last section of this paper is the conclusion segment and it contains a summary of the main points of the study. Reasons for the failure of western economic policies are outlined below.
Why Western Experts have failed
The failure of western experts in bringing about meaningful economic and social changes in developing nations has been highlighted in the works of Friedrich Hayek, who was a renowned economist that specialized in the field of third world economics (Knack 2014). He postulated that the failure of developing countries to achieve significant economic growth (even in the wake of long-standing ties with giant economic institutions based in the West) is the “tyranny of experts” (Knack 2014). Particularly, he draws attention to the failure of these professionals to respect the individual rights of the poor during the implementation of their economic policies (Knack 2014). This analysis shows the dark side of western intervention in developing countries because although injecting money into these economies may appear to be useful (especially to war-ravaged economies and conflict regions) they never help these countries to come out of their economic predicament, at least in a long-term manner. Relative to this assertion, Ünal (2018) says that foreign aid which has been supported by many western economic experts for years has brought more challenges than gains to the recipient nations.
One notable problem that has emerged from the pursuit of western economic ideas in the third world is the emergence of a powerful elitist group that controls the resources provided by western partners to help the poor (Pritchett, Woolcock & Andrews 2013). This problem thrives because foreign aid given by western nations has been diverted into the hands of powerful government officials who unfairly control it on behalf of their citizens (Pritchett, Woolcock & Andrews 2013). Most of these countries have a bad record of governance. Consequently, they have been unable to link possible gains to be made from foreign aid with the amount of money they receive (Bayliss & Van Waeyenberge 2018). This problem has not only been witnessed in Africa but also in many countries in Asia, Latin America, and Eastern Europe, which have received financial assistance from western nations (Del Biondo 2017).
The rise of a super elitist class (which controls foreign funds) in these countries has reinforced social inequities in many regions of the world as well as perpetuating cycles of political abuse because the ruling class is not accountable to other people besides themselves (Patalakh 2018). As Urbain, Mallaye, and Araar (2017) argue, this type of financial support has fuelled the growth of a sophisticated form of authoritarianism – one that feeds a “clique” of elites at the expense of the majority of people who constantly depend on them for survival.
Discussions about the failure of western experts to bring about meaningful change in developing nations have also been documented in research studies that date back as far as 40 years ago. For example, the work by James Bovard in his 1986 nominal article shows that the western model of economic development in the third world has failed on account that it has not brought about meaningful economic changes in the recipient countries (Bayliss & Van Waeyenberge 2018). As such, he says that the success of this economic model can only be measured by evaluating the intention of the western experts and not the outcome of their work (Bayliss & Van Waeyenberge 2018). A modern analysis of the same issue has narrowed the focus down to USAID (an American non-governmental organization) which has been criticized for harboring “white elephant” projects in many parts of the world (Urbain, Mallaye & Araar 2017). Additionally, critics have argued that their work has only created another level of well-paid bureaucrats who are accused of corruption and of meddling with the affairs of the countries they are supposed to partner with (Urbain, Mallaye & Araar 2017).
Evidence of the failure of western professionals to promote sustainable economic growth in developing nations has been reported in Cambodia as a case study. Researchers such as Roth and Tiberti (2017) have pointed out that although the financial assistance provided to the Asian country (by the west) was supposed to promote economic growth, much of it only helped in promoting bad governance. A long-term assessment of the effect of western economic policies in Cambodia has further shown that the western policies employed in the past four decades have made it difficult for the Asian country to take ownership of its development (Tsaurai 2018). Again, there has been a group of Cambodian elites which has emerged and made it impossible to institute meaningful economic reforms because doing so would be to their detriment (Roth & Tiberti 2017). Some studies have also pointed out that the major weakness of the current situation is the unwillingness of authorities to question the economic model of development adopted by the west because of the fear that it would rock the “diplomatic boat” (Roth & Tiberti 2017).
Deaton, an economist based at Princeton University, tries to make sense of western policies of economic development adopted in developing countries by saying that the current model is corrupting governments in these developing nations, thereby making them ineffective in steering the economic goals of their own people (Tsaurai 2018). Pieces of evidence that support this view have been reported in India and South Africa (Bayliss & Van Waeyenberge 2018). Stemming from such findings, it has been reported that more than $130 billion of money spend by developing nations and received from western economic partners have not ended up helping the poor (Bayliss & Van Waeyenberge 2018). The economic model developed by western economists has instead created a stream of money flow to developing nations and it is premised on the principle that the best way to stimulate economic growth in any country is to pump money into the economy (Bayliss & Van Waeyenberge 2018). Time has shown that this policy is ineffective.
Studies done by Mihalache-O’Keef (2018) further show examples of their weaknesses in Africa because throughout the 1980s and 1990s, the continent received a lot of financial assistance from developed countries, but its economy ended up significantly underperforming (Van Der Ploeg & Poelhekke 2017). Studies have shown that the negative correlation between western economic assistance and developing nations is not only present in Africa, but also in other countries around the world (Van (Der Ploeg & Poelhekke 2017; Urbain, Mallaye & Araar 2017). Additionally, evidence has emerged showing that most countries that were more insulated from western economic policies ended up performing better than their counterparts who depended on financial aid from the west (Der Ploeg & Poelhekke 2017; Urbain, Mallaye & Araar 2017). As highlighted by Ünal (2018), the adoption of western economic policies has only contributed towards fuelling mismanagement and misuse of resources in developing nations.
Concerns about the mismanagement of funds further led to the emergence of the principles of “conditionality” and selectivity in the West’s approach to development. For example, this strategy was adopted by western donors in the 1980s and 1990s through the Washington Consensus (Ünal 2018). Relative to this assertion, evidence of this approach was seen through the activities of the International Monetary Fund (IMF) and the World Bank, which redirected their co-financing efforts only to “performing” developing countries (Bird & Rowlands 2017). This approach cemented “conditionality” as a tenet of the western model of development. However, as O’Neill (2013) says, it never truly works in the way that it is intended to operate.
Studies by O’Neill (2011) have also pointed out that even though there may be instances where “conditionality” has shown significant progress, it does not always work in developing nations. Indeed, evidence from Africa shows that the approach has not worked in the way it was intended (Bird & Rowlands 2017). Facts gathered from studies such as Meagher (2018) and McCarthy et al. (2017) also reveal that there is no empirical evidence to support the view that direct financial assistance always supports growth. Such concerns were reported in the 2005 Paris Declaration, which sought to find out whether aid is a true and effective way to bring about lasting social, political, or economic reforms in developing nations (Knack 2014).
The challenge of the western economic model, as practiced in many developing nations, is the assumption that low-income countries have proper institutions of governance and corruption is an insignificant challenge (Der Ploeg & Poelhekke 2017; Urbain, Mallaye & Araar 2017). The same model proposes that countries that do not have proper governance structures (or are blighted by corruption) should be denied financial support. However, such countries have emerged as the ones that need financial support the most (Knack 2014). This finding has created an economic model dilemma because there is a strong correlation between the quality of governance and Gross National Product (GNP) per capita (Knack 2014). In other words, governance and economic development are endogenously related (Der Ploeg & Poelhekke 2017; Urbain, Mallaye & Araar 2017). Comprehensively, the evidence gathered in this section of the analysis shows that western experts have failed to bring meaningful economic change to developing countries. China has adopted a different approach to the same problem and in the subsections of this paper, evidence will be provided to explain why they are likely to succeed relative to their western counterparts.
Why China will succeed
Generally, the vision adopted by Chinese experts is different from that employed by the west because the latter has always been preoccupied with advancing democratic ideals as opposed to market-building (Tsai 2017). The Chinese have adopted the opposite strategy because their top priority is market-building and then everything else follows. Regardless of the nature of their development partners, the Chinese have given low-income nations an opportunity to choose what to prioritize (social or economic reforms) as they engage in constructive discussions for development (Tsai 2017). Comparatively, the development approach adopted by western nations in the post-independence period never gave developing nations this choice.
Relative to the above view, the inclusion of China as a development partner for many low-income nations has been welcomed as a negotiation tool for many governments in developing nations (Joarder, Harris & Dockery 2017). In the past, these countries had no option besides partnering with the western powers to meet their economic goals. However, the introduction of the Chinese in the geopolitical arena has given them leverage to negotiate better with the west or to embrace alternative views of development. Horn and Grugel (2018) argue that if well managed, this option could help leaders of low-income nations to realize economic autonomy by making sure that foreign investments in their countries do more than extract resources.
The strategy adopted by the Chinese is more likely to work compared to their western counterparts because, although an abstract assessment of development would emphasize the need to change democratic ideals, decades of stunted growth, poverty, and impoverishment in developing nations have made its citizens more receptive to market-oriented development as opposed to the pursuit for democratic change (Van Der Ploeg & Poelhekke 2017). Relative to this assertion, Mohan (2018) says that political maturity, which has been achieved by some developing nations, has thrived because some of these countries have made significant economic gains and their growth trajectories are largely broad-based. This view implies that market reforms are essential preconditions for democratic or governance reforms.
Western experts have always employed the opposite strategy, thereby realizing poor results in terms of economic development. Additionally, Joarder, Harris, and Dockery (2017) say that focusing on economic development at the expense of human rights or governance gains is useful for developing nations because it would help to create a strong middle class that will provide the much-needed checks and balances of any regime that has unwarranted or excess power (Joarder, Harris & Dockery, 2017).
Part of the reason why western experts have failed in creating meaningful change in developing nations is their failure to understand that different parts of the world have unique social and cultural dynamics that do not augur well with their western beliefs and values. Consequently, western experts have partly been criticized for “lecturing” low-income nations about development as opposed to partnering with them (Der Ploeg & Poelhekke 2017; Urbain, Mallaye & Araar 2017). This perception has created “bad blood” between them and some of their hosts, including undermining the possibility that they would have a significant impact on the people.
Particularly, studies authored by Gutiérrez-Romero (2013) and Byakagaba et al. (2018) have documented cases where these experts have tied their development agendas with human rights goals, governance structure reforms, and even cultural regulations, which have hardly helped to advance their cause. Additionally, western experts have been unable to differentiate their economic goals from their need to advance their social and cultural ideals in developing nations. Consequently, they have been unable to have a meaningful impact on these economies because their work is undermined by sabotage, suspicion, propaganda, or even the sheer lack of understanding between citizens of developing nations and their expert opinions (Isaksson & Kotsadam 2018). Comparatively, the Chinese have a focused view of development, devoid of the need to impose their value systems on their economic partners.
The above views demonstrate that the influence of western experts in developing nations has been reduced to an ideological “war” between the West and other nations. This view has greatly distorted the intention of the same entity in other countries and brewed some conflicts that have taken a political nature, as opposed to an economic one, which should be the case. Meanwhile, Chinese experts majorly focus on improving the infrastructural network of developing nations, by building bridges, roads, and rails without focusing on the ideological issues that make up the societies in which they operate. This approach makes a compelling case for Chinese experts who can boast of focusing on the economic interests of their partners as opposed to interfering with their social lives. The approach taken by the Chinese experts runs counter to Marxist ideologies. Better yet Gauri, Woolcock, and Desai (2013) say the Chinese could easily lean on the principles and ideologies espoused by Adam Smith to explain their strategic focus on partnering with their counterparts in developing nations to secure economic interests. These principles emphasize the power of focusing on economic development above all other issues as the best model for growth and development.
Conclusion
From the onset of this study, it was established that the development approach adopted by the west has failed because they have been unable to bring meaningful economic gains to developing nations. These experts have traditionally employed an aid-based approach to help low-income nations, but it has been characterized by a propensity to finance consumption as opposed to investments. Consequently, poor macroeconomic management of resources has inhibited the effective use of political and economic institutions in third-world countries to bring economic change. The Chinese have adopted a different approach that focuses on development above all other considerations.
Generally, what emerges from this review is the understanding that Chinese and Western experts use different approaches to partner with developing nations in fostering economic development. Several studies sampled in this investigation show that western professionals use “conditionality” and selectivity as preconditions to partner with developing nations for purposes of economic development. Their approach is also characterized by direct financial support, which makes it difficult for low-income nations to develop the capacity needed to determine their own destinies. Lastly, their strategy is untied. Comparatively, the economic model borrowed from China is centered on “unconditional” support. Their model is also hinged on infrastructure building and not ideological or cultural impositions, as adopted by western scholars. These points of view show that western experts use a different approach from those adopted by the Chinese.
Based on a review of the above views, this paper contains a compelling argument for the success of Chinese experts because they are focused on promoting the economic interests of their partners, as opposed to imposing their beliefs and values as a precondition to economic development. Indeed, the communist party of China has proved that it could expand its influence around the world, not by military means, but by economic development. Comprehensively, the western economic model has not worked and it should be regarded as an outdated concept.
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