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Do natural resources condition the aid-governance relationship? Evidence from Africa

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  • Audrey Rose Menard

    (University of Strasbourg)

Abstract

This paper offers some evidence on why the governance effect of foreign aid is shadowy in African countries. The evidence suggests that the aid-governance relationship is dependent on the type of aid allocation and on the size of natural resources rents held by the recipient country. A dynamic panel data analysis on African countries over the 1997 – 2008 period reveals that (i) foreign aid improves governance if and only if aid is allocated by multilateral agencies; and (ii) the effect of multilateral aid is the stronger the less the recipient country is dependent on natural resources, in particular on oil resources. The combination of multilateral aid and oil rents independence favour the development of good governance in Africa.

Suggested Citation

  • Audrey Rose Menard, 2014. "Do natural resources condition the aid-governance relationship? Evidence from Africa," Economics Bulletin, AccessEcon, vol. 34(2), pages 1317-1326.
    • Handle: RePEc:ebl:ecbull:eb-14-00041
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    More about this item

    Keywords

    Governance; multilateral aid; natural resources;
    All these keywords.

    JEL classification:

    • F3 - International Economics - - International Finance
    • D7 - Microeconomics - - Analysis of Collective Decision-Making

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