This paper explores whether foreign aid is driven by a (hidden) contest amongst donors to access natural resources, exploiting the timing and size of major mineral discoveries using a gravity model for a large panel of countries. Results show that recipient countries that experience major discoveries receive more, not less, bilateral aid, all else equal. Our main result is driven indirectly by China’s entry into the World Trade Organization in 2001, which intensified global competition for access to natural resources. We conclude that the energy transition and its requirement in minerals will further exacerbate the (hidden) contest amongst aid donors.
