Paper short abstract:

I examine the institutional drivers of the adaptation and successful deployment of Chinese-inspired, infrastructure-led development strategies in developing countries. Case studies of projects in Kenya and Ethiopia reveal that governmental coordination, property rights institutions, and economic structure can help explain variations in project design and economic outcomes.

Paper long abstract:

Place-based and infrastructure-led development strategies are receiving renewed attention. Although partly a reaction to widening social and geographic inequalities in the Global North, this owes also to the externalisation of China’s infrastructure-heavy model through its impressive developmental trajectory and its overseas investment. This paper examines the process through which this model was diffused to African countries, the local adaptations that it engendered, and the preconditions for its successful deployment. Empirical material is drawn from a study of Chinese-financed and built industrial and infrastructure projects in Kenya and Ethiopia. The first part of the paper examines the “land revenue regime” that undergirded China’s spectacular infrastructure-led economic boom, highlighting its institutional and ideational underpinnings. The subsequent empirical analysis draws on original and secondary research to examine the ways in which institutional features drove the adaptation of the infrastructure-led paradigm to African settings and its consequences for project performance. I highlight three explanatory variables. Firstly, I look at the authorising environment in which investment decisions are made and the degree to which they allow for coordination, focusing on the consequences of multi-level governance. Secondly, I examine the influence of property rights institutions on project costs and on the scope for induced economic responses. Finally, I discuss how the macroeconomic environment and existing productive capabilities condition these responses. Through this exercise, I put forward an institutional theory of infrastructure-led development, shedding light on how changing development paradigms, as well as the advent of initiatives such as the BRI, may differentially impact developing countries’ policies.