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

Cécile Couharde (), Fatih Karanfil (), Eric Gabin Kilama () and Luc Omgba
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Fatih Karanfil: EconomiX - EconomiX - UPN - Université Paris Nanterre - CNRS - Centre National de la Recherche Scientifique
Eric Gabin Kilama: EconomiX - EconomiX - UPN - Université Paris Nanterre - CNRS - Centre National de la Recherche Scientifique

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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)
Date: 2017
Note: View the original document on HAL open archive server: https://hal.science/hal-04141627
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Working Paper: The Importance of Oil in the Allocation of Foreign Aid: The case of the G7 donors (2017)
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