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The Importance of Oil in the Allocation of Foreign Aid: The case of the G7 donors

Cécile Couharde, Fatih Karanfil (), Eric Gabin Kilamaa and Luc Désiré Omgbaa
Authors registered in the RePEc Author Service: Luc Désiré OMGBA and Eric Gabin Kilama ()

No 2017-40, EconomiX Working Papers from University of Paris Nanterre, EconomiX

Abstract: While it is often alleged that oil endowment might influence the destination of foreign aid, there is 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 address those points. Specifically, we investigate the role of oil in aid allocation of the G7 donors, over the 1980-2010 period. 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 find evidence for competition for access to oil supplies among this group of donors.

Keywords: aid allocation; G7 donors; oil competition; spatial lag model. (search for similar items in EconPapers)
JEL-codes: F35 Q35 C31 (search for similar items in EconPapers)
Pages: 30 pages
Date: 2017
New Economics Papers: this item is included in nep-cdm and nep-dev
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Persistent link: https://EconPapers.repec.org/RePEc:drm:wpaper:2017-40

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