Why Give Aid to Resource-Rich Autocrats?

Mare Sarr, Chiara Ravetti and Timothy Swanson

No 39-2015, CIES Research Paper series from Centre for International Environmental Studies, The Graduate Institute

Abstract: Why give aid to resource-rich autocrats? We find that the interaction between natural resources and most forms of international aid results in enhanced political instability in most autocratic countries. Interestingly, some types of government aid (notably humanitarian aid) do not have this effect, indicating that the impact of aid varies with its form. Furthermore, we find that only aid structured in the form of loans (rather than grants) is more likely to flow toward resource-rich autocracies. This combination of loans with any political instability they may induce, can create speculative rights (for the donor) in the resource-riches of the recipient country. This potential claim on resources provides one important strategic reason to give aid to resource-rich autocrats. Aid can act as a form of foreign intervention in the pursuit of regime change, and claims on resources.

Keywords: Foreign Aid; Resource Curse; Economic Growth; Dictatorship; Looting. (search for similar items in EconPapers)
JEL-codes: F35 O11 O13 (search for similar items in EconPapers)
Pages: 33 pages
Date: 2015-11-23
New Economics Papers: this item is included in nep-dev and nep-env
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:gii:ciesrp:cies_rp_39

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