Does access to natural resources explain official development assistance in West African countries?

Abstract

In West Africa, the distribution of official development assistance is no longer based solely on humanitarian or governance criteria, but also on the geostrategic value of natural resources. These resources sometimes attract the interest of powers wishing to secure access to them through aid, while at other times they make resource-rich recipient countries less eligible, as they are perceived to be self-sufficient. The aim of this research is to analyze the effect of natural resource exploitation on official development assistance received by 13 West African countries over the period 1985–2020. Several estimation methods are used including: Two-stage Least Squares or Instrumental Variable Least Squares, Driscoll-Kraay Regression with Standard Errors, Kinky Least Squares and Instrumental Variables with two high-dimensional fixed effects that take into account donor heterogeneity. The results show that the exploitation of natural resources, particularly forestry, mining and oil, has a positive influence on the Official Development Assistance received by West African countries. More specifically, the exploitation of these resources attracts more bilateral ODA, while multilateral ODA is mainly influenced by the exploitation of forestry and mining resources. These results provide decision-makers with a strategic opportunity to use natural resources as negotiating leverage to mobilize aid for infrastructure and energy projects that are essential to the local transformation of natural resources. These results are also fully in line with the Sustainable Development Goals, underlining the role of natural resources as a lever for financing inclusive growth projects and better environmental governance.