Aid and policy preferences in oil-rich countries
comparing Indonesia and Nigeria
This paper analyses the role of foreign aid in assisting development in two oil-rich countries: Indonesia and Nigeria. It seeks to understand the way foreign aid provided assistance to transform Indonesia from a ‘fragile’ state in the 1960s into one of the ‘Asian Tigers’ in the mid-1990s, and why it did not prevent Nigeria from falling into ‘African Tragedy’. The paper argues that foreign aid may help not only to finance development, but also to navigate policy makers’ policy choices. It shows how foreign aid may or may not help policy makers turn their policy preferences into action.