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Armed conflict, terrorism, and the allocation of foreign aid

Author

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  • Piotr Lis

    (University of Coventry)

Abstract

Armed conflict and terrorism damage economic development through disruption of economic activity, trade, and the destruction of human and physical resources. They also can affect foreign aid allocation, but the likely net effect of this is not obvious. On the one hand, donors may be discouraged and reduce aid. On the other hand, donors may provide more aid, for instance as a reimbursement for counter-terrorism efforts that benefit the donor country. This article aims to identify the net effect using data for a panel of countries. It finds that armed conflict does have a large and negative effect on bilateral and multilateral aid, but that bilateral donors seem to turn a blind eye to violence occurring in oil-exporting countries. Further, the article finds that while transnational terrorism tends to increase bilateral aid, bilateral donors seem indifferent to domestic terrorism. In contrast, multilateral aid is found not to react to transnational terrorism, but does react to domestic terrorism.

Suggested Citation

  • Piotr Lis, 2013. "Armed conflict, terrorism, and the allocation of foreign aid," Economics of Peace and Security Journal, EPS Publishing, vol. 8(1), pages 12-17, April.
    • Handle: RePEc:epc:journl:v:8:y:2013:i:1:p:12-17
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    File URL: http://www.epsjournal.org.uk/index.php/EPSJ/article/view/144
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    Cited by:

    1. Munyanyi, Musharavati Ephraim & Awaworyi Churchill, Sefa, 2022. "Foreign aid and energy poverty: Sub-national evidence from Senegal," Energy Economics, Elsevier, vol. 108(C).
    2. Lis, Piotr, 2018. "The impact of armed conflict and terrorism on foreign aid: A sector-level analysis," World Development, Elsevier, vol. 110(C), pages 283-294.
    3. Raphael J. Nawrotzki & Verena Gantner & Jana Balzer & Thomas Wencker & Sabine Brüntrup-Seidemann, 2022. "Strategic Allocation of Development Projects in Post-Conflict Regions: A Gender Perspective for Colombia," Sustainability, MDPI, vol. 14(4), pages 1-26, February.
    4. Lis Piotr, 2014. "Terrorism, Armed Conflict and Foreign Aid," Peace Economics, Peace Science, and Public Policy, De Gruyter, vol. 20(4), pages 1-13, December.

    More about this item

    Keywords

    Conflict; terrorism; aid;
    All these keywords.

    JEL classification:

    • H56 - Public Economics - - National Government Expenditures and Related Policies - - - National Security and War
    • O2 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy
    • F35 - International Economics - - International Finance - - - Foreign Aid

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