Development Aid for Infrastructure Investment in Africa: Malian Relations with China, the European Commission and the World Bank

This research paper compares infrastructure aid in Mali from the World Bank, the European Commission, and China. It finds that while traditional donors impose higher short-term transaction costs through strict evaluation and reporting, Chinese aid is perceived as having lower short-term risk but higher long-term uncertainty. The study highlights how 'tied aid' restrictions on contractors hinder multi-donor coordination and notes that in stable countries like Mali, Chinese aid tends to complement rather than replace traditional OECD aid.

• Recipient governments face significant 'hidden' transaction costs when accepting aid. For traditional donors like the World Bank and EC, these include evaluation costs, losses from currency shifts, and the administrative burden of complying with reporting requirements, which can delay project implementation. For Chinese aid, transaction costs may include lost tax revenue from import duty exonerations on building materials and the political opportunity cost of adhering to the One China Policy.
• Donor-imposed eligibility restrictions on contractors hinder the coordination of multi-donor infrastructure projects. Chinese aid for the third Bamako bridge required the use of Chinese companies, while EC-funded projects are generally restricted to contractors from the EC or the Africa–Caribbean–Pacific (ACP) group, effectively meaning European contractors. This incompatibility makes joint funding between the EC and China unlikely.
• The Malian government perceives a 'South–South partner' identity in its relations with China, which adds credibility to Chinese aid. This is evidenced by the perception that Chinese engineers are paid according to local rates and live in similar conditions to their Malian colleagues, contrasting with French engineers who are perceived to be paid significantly more.
• In the context of Mali, Chinese infrastructure aid does not substitute for traditional OECD aid but rather complements it. Because Mali is a stable country where governance conditions remain attached to the bulk of its aid agreements, there is less likelihood that Chinese aid will undermine the good governance efforts of OECD nations.

APA

Fletcher, H. (2010). Development Aid for Infrastructure Investment in Africa: Malian Relations with China, the European Commission and the World Bank. South African Institute of International Affairs. https://saiia.org.za/wp-content/uploads/2010/04/Occasional-Paper-58.pdf

Chicago

Fletcher, Henry. Development Aid for Infrastructure Investment in Africa: Malian Relations with China, the European Commission and the World Bank. South African Institute of International Affairs, 2010. https://saiia.org.za/wp-content/uploads/2010/04/Occasional-Paper-58.pdf.

Wikipedia

{{cite report |last1=Fletcher |first1=Henry |title=Development Aid for Infrastructure Investment in Africa: Malian Relations with China, the European Commission and the World Bank |publisher=South African Institute of International Affairs |date=April 2010 |url=https://saiia.org.za/wp-content/uploads/2010/04/Occasional-Paper-58.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{fletcher2010development, author = {Fletcher, Henry}, title = {{Development Aid for Infrastructure Investment in Africa: Malian Relations with China, the European Commission and the World Bank}}, institution = {South African Institute of International Affairs}, year = {2010}, month = apr, url = {https://saiia.org.za/wp-content/uploads/2010/04/Occasional-Paper-58.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }