IDEAS home Printed from https://ideas.repec.org/a/wly/natres/v50y2026i1p38-63.html

The nexus of foreign aid, institutional quality, and climate‐related financial policies: Evidence from the global database

Author

Listed:
  • Le Thanh Ha

Abstract

This article represents the first endeavor to establish a connection between foreign aid and climate‐related financial policies (CRFPs) within the European region. The findings are critical to suggest policy implications for governments in making capital flow effective, especially in mitigating environmental degradation. CRFPs represent the count of climate‐related financial policies implemented by 28 European countries annually from 2010 to 2021. We utilize four distinct indicators to capture foreign aid, namely net foreign aid, net Official Development Assistance (ODA) received development index, net ODA received share, and net ODA received per capita. Our research reveals that foreign aid has an adverse effect on CRFPs, as evidenced across all four measures of foreign aid. Notably, the net ODA received share demonstrates a nonlinear relationship with CRFPs. Additionally, we conducted a study to examine how institutional quality moderates the association between financial aid and the implementation of CRFPs. The findings suggest that good institutional quality amplifies the impact of foreign aid on CRFPs.

Suggested Citation

  • Le Thanh Ha, 2026. "The nexus of foreign aid, institutional quality, and climate‐related financial policies: Evidence from the global database," Natural Resources Forum, Blackwell Publishing, vol. 50(1), pages 38-63, February.
    • Handle: RePEc:wly:natres:v:50:y:2026:i:1:p:38-63
    DOI: 10.1111/1477-8947.12553
    as

    Download full text from publisher

    File URL: https://doi.org/10.1111/1477-8947.12553
    Download Restriction: no
    File URL: https://libkey.io/10.1111/1477-8947.12553?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Zexian Chen & Jingjing He, 2013. "Foreign Aid for Climate Change Related Capacity Building," WIDER Working Paper Series wp-2013-046, World Institute for Development Economic Research (UNU-WIDER).
    2. Chen, Zexian & He, Jingjing, 2013. "Foreign Aid for Climate Change Related Capacity Building," WIDER Working Paper Series 046, World Institute for Development Economic Research (UNU-WIDER).
    3. Marcoux, Christopher & Parks, Bradley C. & Peratsakis, Christian M. & Roberts, J. Timmons & Tierney, Michael J., 2013. "Environmental and Climate Finance in a New World: How Past Environmental Aid Allocation Impacts Future Climate Aid," WIDER Working Paper Series 128, World Institute for Development Economic Research (UNU-WIDER).
    4. Christopher Marcoux & Bradley C. Parks & Christian M. Peratsakis & Timmons Roberts & Michael J. Tierney, 2013. "Environmental and Climate Finance in a New World: How Past Environmental Aid Allocation Impacts Future Climate Aid," WIDER Working Paper Series wp-2013-128, World Institute for Development Economic Research (UNU-WIDER).
    5. David Victor, 2013. "Foreign Aid for Capacity-Building to Address Climate Change: Insights and Applications," WIDER Working Paper Series wp-2013-084, World Institute for Development Economic Research (UNU-WIDER).
    6. J. Timmons Roberts & Romain Weikmans, 2017. "Postface: fragmentation, failing trust and enduring tensions over what counts as climate finance," International Environmental Agreements: Politics, Law and Economics, Springer, vol. 17(1), pages 129-137, February.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Thanh Ha, Le, 2025. "Gauging the level of dynamic between climate policy and foreign aid in Vietnam," International Economics, Elsevier, vol. 182(C).
    2. Daniel Y. Kono & Gabriella R. Montinola, 2019. "Foreign aid and climate change policy: What can('t) the data tell us?," WIDER Working Paper Series wp-2019-15, World Institute for Development Economic Research (UNU-WIDER).
    3. Daniel Yuichi Kono & Gabriella R. Montinola, 2019. "Foreign Aid and Climate Change Policy: What Can(’t) the Data Tell Us?," Politics and Governance, Cogitatio Press, vol. 7(2), pages 68-92.
    4. Channing Arndt & Finn Tarp, 2017. "Aid, Environment and Climate Change," Review of Development Economics, Wiley Blackwell, vol. 21(2), pages 285-303, May.
    5. Daniel Yuichi Kono & Gabriella R. Montinola, 2019. "Foreign Aid and Climate Change Policy: What Can(’t) the Data Tell Us?," Politics and Governance, Cogitatio Press, vol. 7(2), pages 68-92.
    6. Luis Ferney Moreno Castillo (Director editorial) & Carlos Villanueva (Coordinación), 2022. "Anuario iberoamericano de derecho de la energía. Volumen IV, Hacia un derecho global de la energía," Books, Universidad Externado de Colombia, Facultad de Derecho, number 1345.
    7. Pengjie Lu & Guanghua Qiao, 2024. "The Influence of Climate Perception and Low-Carbon Awareness on the Emission Reduction Willingness of Decision Makers in Large-Scale Dairy Farming: Evidence from the Midwest of Inner Mongolia, China," Sustainability, MDPI, vol. 16(17), pages 1-19, August.
    8. Kim, Jung Eun, 2018. "Technological capacity building through energy aid: Empirical evidence from renewable energy sector," Energy Policy, Elsevier, vol. 122(C), pages 449-458.
    9. Marije Hoff & Hugo Jan de Boer, 2020. "A Question-Based Method to Calculate the Human Appropriation of Land for Food (HALF) Index," Sustainability, MDPI, vol. 12(24), pages 1-12, December.
    10. Caixia Wang & Huijie Li, 2025. "What influences the capacity of donor agency for sustainable development: a study of climate aid projects," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 27(7), pages 16941-16961, July.
    11. Dylan Bugden & Jesse Brazil, 2024. "The role of geostrategic interests in motivating public support for foreign climate aid," Journal of Environmental Studies and Sciences, Springer;Association of Environmental Studies and Sciences, vol. 14(4), pages 803-813, December.
    12. Lin, Weiqiang, 2014. "The politics of flying: aeromobile frictions in a mobile city," Journal of Transport Geography, Elsevier, vol. 38(C), pages 92-99.
    13. Kissinger, Gabrielle & Gupta, Aarti & Mulder, Ivo & Unterstell, Natalie, 2019. "Climate financing needs in the land sector under the Paris Agreement: An assessment of developing country perspectives," Land Use Policy, Elsevier, vol. 83(C), pages 256-269.
    14. Robert Bergsvik & Aarti Gupta & Romain Weikmans & Ina Möller, 2024. "Is transparency furthering clarity in multilateral climate governance? The case of climate finance," International Environmental Agreements: Politics, Law and Economics, Springer, vol. 24(4), pages 565-588, December.
    15. Shalini Talwar & Nourah O. Alshaghdali & Bhumika Gupta & Enrico Battisti, 2026. "Climate Finance for Sustainable Development: Substantive Agendas and Future Directions," Sustainable Development, John Wiley & Sons, Ltd., vol. 34(1), pages 321-337, February.
    16. repec:bjf:journl:v:10:y:2025:i:10:p:551-567 is not listed on IDEAS
    17. Md. Nazirul Islam Sarker & Yang Peng & Most. Nilufa Khatun & G. M. Monirul Alam & Roger C. Shouse & Md. Ruhul Amin, 2022. "Climate finance governance in hazard prone riverine islands in Bangladesh: pathway for promoting climate resilience," Natural Hazards: Journal of the International Society for the Prevention and Mitigation of Natural Hazards, Springer;International Society for the Prevention and Mitigation of Natural Hazards, vol. 110(2), pages 1115-1132, January.
    18. Mizan Khan & Stacy-ann Robinson & Romain Weikmans & David Ciplet & J. Timmons Roberts, 2020. "Twenty-five years of adaptation finance through a climate justice lens," Climatic Change, Springer, vol. 161(2), pages 251-269, July.
    19. Aarti Gupta & Harro van Asselt, 2019. "Transparency in multilateral climate politics: Furthering (or distracting from) accountability?," Regulation & Governance, John Wiley & Sons, vol. 13(1), pages 18-34, March.
    20. Aghilasse Kashi & Mohamed Eskandar Shah, 2023. "Bibliometric Review on Sustainable Finance," Sustainability, MDPI, vol. 15(9), pages 1-30, April.
    21. Jonathan Pickering & Carola Betzold & Jakob Skovgaard, 2017. "Special issue: managing fragmentation and complexity in the emerging system of international climate finance," International Environmental Agreements: Politics, Law and Economics, Springer, vol. 17(1), pages 1-16, February.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wly:natres:v:50:y:2026:i:1:p:38-63. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: https://doi.org/10.1111/(ISSN)1477-8947 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.