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The role of oil in the allocation of foreign aid: The case of the G7 donors

Author

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  • 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
  • Luc-Désiré Omgba

Abstract

While it is often alleged that oil endowment might influence the destination of foreign aid, there is a lack of empirical evidence of how and why such an effect may come into play, and even less so of the channels through which it works. This paper aims to bring evidence that contributes to addressing those points. Specifically, we investigate the role of oil in aid allocation of the G7 donors. Results show that, unsurprisingly, aid allocated by these donors 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 provide evidence on the existence of competition for access to oil supplies among this group of donors.

Suggested Citation

  • Cécile Couharde & Fatih Karanfil & Eric Gabin Kilama & Luc-Désiré Omgba, 2020. "The role of oil in the allocation of foreign aid: The case of the G7 donors," Post-Print hal-02307821, HAL.
    • Handle: RePEc:hal:journl:hal-02307821
    Note: View the original document on HAL open archive server: https://hal.science/hal-02307821
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    2. Ongo Nkoa, Bruno Emmanuel & Tadadjeu, Sosson & Njangang, Henri, 2023. "Rich in the dark: Natural resources and energy poverty in Sub-Saharan Africa," Resources Policy, Elsevier, vol. 80(C).

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    Keywords

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    JEL classification:

    • F35 - International Economics - - International Finance - - - Foreign Aid
    • Q34 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Natural Resources and Domestic and International Conflicts
    • Q37 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Issues in International Trade

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