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

Cécile Couharde (), Fatih Karanfil, Eric Gabin Kilama and Luc Omgba

Journal of Comparative Economics, 2020, vol. 48, issue 2, 363-383

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.

Keywords: Oil endowment; Aid allocation; G7 donors; Oil competition (search for similar items in EconPapers)
JEL-codes: F35 Q34 Q37 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jcecon:v:48:y:2020:i:2:p:363-383

DOI: 10.1016/j.jce.2019.10.001

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