Does Mineral Exploration Attract Foreign Aid? Subnational Evidence from Africa

Details

Supervisors

Maystadt, Jean-François

Faculty

Faculté des sciences économiques, sociales, politiques et de communication

Degree label

Master [120] en sciences économiques, orientation générale, à finalité spécialisée

Abstract

enThe energy transition has placed African critical minerals at the centre of contemporary diplomacy, driving strategic bilateral agreements between major donor governments and producer countries. While the agreements are recent, the resource-access motive they formalise is not. This thesis evaluates whether these national-level dynamics alter subnational allocation rules, testing whether African second-level administrative units (ADM2) receive systematically more foreign aid following the start of mineral exploration. To examine this question, I construct an annual continental panel of 6,279 African ADM2 polygons spanning 1990 to 2020. The dataset integrates geocoded aid disbursements from nineteen Western donors and the World Bank with a georeferenced mineral-exploration registry and global mining land-use polygons. Chinese development finance, for which only commitments are recorded, is analysed separately through its ODA-like component. Leveraging staggered difference-in-differences estimators robust to heterogeneous treatment effects, combined with within-country propensity-score matching, I find a null for total aid. The start of mineral exploration produces no detectable change in a district’s subsequent aid receipts. Beneath the composite, the primary Poisson estimator attributes significant positive responses to World Bank aid and production-sector aid, but the secondary Callaway–Sant’Anna estimator finds no response for any composite and pre-trend diagnostics caution against a causal reading of the positive estimates. Chinese ODA on the post-2000 panel shows no response at the ADM2 level under either estimator. Supplementary descriptive country-and-year fixed-effects PPML regressions confirm that contemporaneous mineral status does not robustly predict aid allocation. Collectively, these findings indicate that while major donors increasingly negotiate high-level strategic agreements for resource access, there is no evidence in these data of a broad, localised targeting of recorded aid to mineral-bearing districts.