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The Importance of Oil in the Allocation of Foreign Aid

Author

Listed:
  • Cécile Couharde

    (EconomiX - EconomiX - UPN - Université Paris Nanterre - CNRS - Centre National de la Recherche Scientifique)

  • Fatih Karanfil

    (EconomiX - EconomiX - UPN - Université Paris Nanterre - CNRS - Centre National de la Recherche Scientifique)

  • Eric Gabin Kilama

    (EconomiX - EconomiX - UPN - Université Paris Nanterre - CNRS - Centre National de la Recherche Scientifique)

  • Luc-Désiré Omgba

    (EconomiX - EconomiX - UPN - Université Paris Nanterre - CNRS - Centre National de la Recherche Scientifique)

Abstract

While it is often alleged that natural resource endowment might influence the destination of foreign aid, there is lack of empirical evidence in which this map may come into play, and even less so in which channels this can operate. This paper aims to bring evidence that contributes to address those points. Specifically, we investigate the role of oil in aid allocation of the major OECD donors, namely the G7 countries, over the 1980-2010 period. Results show that, unsurprisingly, aid allocated by these countries increases significantly with oil endowment of recipient countries. Looking more deeply, we interestingly show that their strategic interests in terms of oil security play a role in their provision of aid. More importantly, we find evidence for competition for access to oil supplies among OECD donors.

Suggested Citation

  • Cécile Couharde & Fatih Karanfil & Eric Gabin Kilama & Luc-Désiré Omgba, 2017. "The Importance of Oil in the Allocation of Foreign Aid," Post-Print hal-01549900, HAL.
    • Handle: RePEc:hal:journl:hal-01549900
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