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Audrey Rose Menard
''Do natural resources condition the aid-governance relationship? Evidence from Africa.''
( 2014, Vol. 34 No.2 )
This paper offers some evidence on why the governance effect of foreign aid is shadowy in African countries. The evidence suggests that the aid-governance relationship is dependent on the type of aid allocation and on the size of natural resources rents held by the recipient country. A dynamic panel data analysis on African countries over the 1997 – 2008 period reveals that (i) foreign aid improves governance if and only if aid is allocated by multilateral agencies; and (ii) the effect of multilateral aid is the stronger the less the recipient country is dependent on natural resources, in particular on oil resources. The combination of multilateral aid and oil rents independence favour the development of good governance in Africa.
Keywords: Governance, multilateral aid, natural resources
JEL: F3 - International Finance: General
D7 - Analysis of Collective Decision-Making: General
Manuscript Received : Jan 17 2014 Manuscript Accepted : Jun 20 2014

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