Oil Rents, Governance, and the Displacement of Aid: Quasi-Experimental Evidence from Chad, 1990–2023

Oil Rents, Governance, and the Displacement of Aid: Quasi-Experimental Evidence from Chad, 1990–2023 | Research Square window.SnipcartSettings = { analytics: { enabled: false } }; (function() { var accessVector = localStorage.getItem('access_vector') || ''; window.dataLayer = window.dataLayer || []; if (accessVector) { window.dataLayer.push({ user: { profile: { profileInfo: { snid: accessVector } } } }); } })(); (function(w,d,s,l,i){w[l]=w[l]||[];w[l].push({'gtm.start':new Date().getTime(),event:'gtm.js'});var f=d.getElementsByTagName(s)[0],j=d.createElement(s),dl=l!='dataLayer'?'&l='+l:'';j.async=true;j.src='https://www.googletagmanager.com/gtm.js?id='+i+dl;f.parentNode.insertBefore(j,f);})(window,document,'script','dataLayer','GTM-K279D39R'); Browse Preprints In Review Journals COVID-19 Preprints AJE Video Bytes Research Tools Research Promotion AJE Professional Editing AJE Rubriq About Preprint Platform In Review Editorial Policies Our Team Advisory Board Help Center Sign In Submit a Preprint Cite Share Download PDF Research Article Oil Rents, Governance, and the Displacement of Aid: Quasi-Experimental Evidence from Chad, 1990–2023 Douzounet Mallaye, Michel Armel NDAYIKEZA, Mahamat Ibrahim AHMAT-TIDJANI This is a preprint; it has not been peer reviewed by a journal. https://doi.org/ 10.21203/rs.3.rs-9610109/v1 This work is licensed under a CC BY 4.0 License Status: Under Review Version 1 posted 8 You are reading this latest preprint version Abstract This paper provides causal evidence that oil rents structurally displace foreign aid in resource-dependent states, using Chad as a quasi-experimental laboratory over 1990–2023. We advance the literature through four methodological contributions. First, extending the Synthetic Control Method (SCM) to cover two complete oil price cycles captures boom–bust–recovery dynamics absent from earlier single-cycle estimates. Second, we address donor pool fragility by constructing and validating an expanded eight-country pool, demonstrating robustness across specifications: post-to-pre RMSPE ratios of 17.4 and 16.8, with exact permutation p-values of 0.25 and 0.11 respectively. Third, a causal mediation analysis decomposes the total treatment effect into a direct fiscal channel—donors reducing allocations in response to perceived revenue improvement—and a governance degradation channel, through which resource rents erode institutional quality and trigger further aid contraction. The governance channel accounts for approximately 27 percent of the total crowding-out effect, intensifying in the post-2017 period as institutional deterioration compounds initial fiscal signalling. Fourth, disaggregating ODA by function reveals that oil rents substantially crowd out development assistance (− 6.9 pp of GNI) and budget support (− 0.8 pp), while humanitarian aid remains unaffected, exposing a structural compositional shift in the external finance envelope. The mean treatment effect over 2003–2023 is − 5.42 pp of GNI per annum. These findings establish that oil-induced aid displacement is persistent, partially self-reinforcing through governance erosion, and uncompensated by humanitarian inflows—with direct implications for fiscal planning in resource-rich fragile states. JEL Classification: Q32 · F35 · C21 · D73 · O11 · O55 · H87 Oil rents Foreign aid crowding-out Synthetic Control Method Causal mediation analysis Governance degradation ODA composition Resource curse Fragile states Chad Full Text Additional Declarations No competing interests reported. Cite Share Download PDF Status: Under Review Version 1 posted Reviewers agreed at journal 10 May, 2026 Reviewers agreed at journal 10 May, 2026 Reviewers agreed at journal 10 May, 2026 Reviewers agreed at journal 10 May, 2026 Reviewers invited by journal 08 May, 2026 Editor assigned by journal 07 May, 2026 Submission checks completed at journal 07 May, 2026 First submitted to journal 04 May, 2026 You are reading this latest preprint version Research Square lets you share your work early, gain feedback from the community, and start making changes to your manuscript prior to peer review in a journal. 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Also discoverable on Platform About Our Team In Review Editorial Policies Advisory Board Help Center Resources Author Services Accessibility API Access RSS feed Manage Cookie Preferences © Research Square 2026 | ISSN 2693-5015 (online) Privacy Policy Terms of Service Do Not Sell My Personal Information {"props":{"pageProps":{"initialData":{"identity":"rs-9610109","acceptedTermsAndConditions":true,"allowDirectSubmit":false,"archivedVersions":[],"articleType":"Research Article","associatedPublications":[],"authors":[{"id":637792780,"identity":"b931aa45-3b4e-4754-a0ed-c3b283f73a8e","order_by":0,"name":"Douzounet Mallaye","email":"data:image/png;base64,iVBORw0KGgoAAAANSUhEUgAAAZAAAAAyAQMAAABI0h/eAAAABlBMVEX///8AAABVwtN+AAAACXBIWXMAAA7EAAAOxAGVKw4bAAABE0lEQVRIiWNgGAWjYDCCAwgm44EHQJKfgYGNAUIT0MIDYicACckGiBYgTawWgwMEtPAd7zH+8LHtjpy92OEHBxJqDssZ30h+9uBDBYOEOQ49kmfOGBjObHtmzCOdZnAg4dhhY7MbaeaGM84wSMgcwK7F4EaOQTJv2+HEHukEoBa2w4nbbiSYSfO2MdRJ4HAYSMthoJb6Hun0DwcS/h2u3zwj/RtIiwQeLYbNQC0JPNI5BgcSgQwDiRwzvFokzxwrZpxx7rBhz+2cggOJfelAb7wpk5xxRgKnFr7jzZs/fCg7LM8+O33jgw/frOX529O3SXyosMGpBR00MzAIJIAYxGpgYKgDppQDRKseBaNgFIyCkQEA/ZVirbY7vyAAAAAASUVORK5CYII=","orcid":"","institution":"University of N'Djamena","correspondingAuthor":true,"prefix":"","firstName":"Douzounet","middleName":"","lastName":"Mallaye","suffix":""},{"id":637792785,"identity":"a6b47e02-130e-4436-9526-70c1c123ec02","order_by":1,"name":"Michel Armel NDAYIKEZA","email":"","orcid":"","institution":"Université du Burundi","correspondingAuthor":false,"prefix":"","firstName":"Michel","middleName":"Armel","lastName":"NDAYIKEZA","suffix":""},{"id":637792789,"identity":"5f38d5f9-f70c-40e1-9d6d-57e30a705727","order_by":2,"name":"Mahamat Ibrahim AHMAT-TIDJANI","email":"","orcid":"","institution":"University of N'Djamena","correspondingAuthor":false,"prefix":"","firstName":"Mahamat","middleName":"Ibrahim","lastName":"AHMAT-TIDJANI","suffix":""}],"badges":[],"createdAt":"2026-05-04 15:41:46","currentVersionCode":1,"declarations":"","doi":"10.21203/rs.3.rs-9610109/v1","doiUrl":"https://doi.org/10.21203/rs.3.rs-9610109/v1","draftVersion":[],"editorialEvents":[],"editorialNote":"","failedWorkflow":false,"files":[{"id":109452474,"identity":"2fd30099-a52d-4fd2-86f4-7d3202383c52","added_by":"auto","created_at":"2026-05-18 09:14:56","extension":"pdf","order_by":1,"title":"","display":"","copyAsset":false,"role":"manuscript-pdf","size":553841,"visible":true,"origin":"","legend":"","description":"","filename":"okOilRentsGovernanceChadWithFigures2.pdf","url":"https://assets-eu.researchsquare.com/files/rs-9610109/v1_covered_bd81fc04-b87f-4553-9664-360645d8493f.pdf"}],"financialInterests":"No competing interests reported.","formattedTitle":"\u003cp\u003e\u003cstrong\u003eOil Rents, Governance, and the Displacement of Aid: \u003c/strong\u003eQuasi-Experimental Evidence from Chad, 1990–2023\u003c/p\u003e","fulltext":[],"fulltextSource":"","fullText":"","funders":[],"hasAdminPriorityOnWorkflow":false,"hasManuscriptDocX":false,"hasOptedInToPreprint":true,"hasPassedJournalQc":"","hasAnyPriority":false,"hideJournal":false,"highlight":"","institution":"","isAcceptedByJournal":false,"isAuthorSuppliedPdf":true,"isDeskRejected":"","isHiddenFromSearch":false,"isInQc":false,"isInWorkflow":false,"isPdf":true,"isPdfUpToDate":true,"isWithdrawnOrRetracted":false,"journal":{"display":true,"email":"[email protected]","identity":"economics-of-governance","isNatureJournal":false,"hasQc":true,"allowDirectSubmit":false,"externalIdentity":"eogo","sideBox":"Learn more about [Economics of Governance](http://link.springer.com/journal/10101)","snPcode":"10101","submissionUrl":"https://submission.nature.com/new-submission/10101/3","title":"Economics of Governance","twitterHandle":"","acdcEnabled":true,"dfaEnabled":true,"editorialSystem":"em","reportingPortfolio":"Springer Hybrid","inReviewEnabled":true,"inReviewRevisionsEnabled":false},"keywords":"Oil rents, Foreign aid crowding-out, Synthetic Control Method, Causal mediation analysis, Governance degradation, ODA composition, Resource curse, Fragile states, Chad","lastPublishedDoi":"10.21203/rs.3.rs-9610109/v1","lastPublishedDoiUrl":"https://doi.org/10.21203/rs.3.rs-9610109/v1","license":{"name":"CC BY 4.0","url":"https://creativecommons.org/licenses/by/4.0/"},"manuscriptAbstract":"\u003cp\u003eThis paper provides causal evidence that oil rents structurally displace foreign aid in resource-dependent states, using Chad as a quasi-experimental laboratory over 1990–2023. 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