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The Global War on Terror and U.S. Development Assistance: USAID allocation by country, 1998-2005

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  • Todd Moss

    ()

  • David Roodman
  • Scott Standley

Abstract

The launch of the Global War on Terror (GWOT) soon after September 11, 2001 has been predicted to fundamentally alter U.S. foreign aid programs. In particular, there is a common expectation that development assistance will be used to support strategic allies in the GWOT, perhaps at the expense of anti-poverty programs. In this paper we assess changes in country allocation by USAID over 1998-2001 versus 2002-05. In addition to standard aid allocation variables, we add several proxies for the GWOT, including the presence of foreign terrorist groups, sharing a border with a state sponsor of terrorism, troop contribution in Iraq, and relative share of Muslim population. We find that any major changes in aid allocation related to the GWOT appear to be affecting only a handful of critical countries, namely, Iraq, Afghanistan, Jordan, and the Palestinian Territories. The extra resources to these countries also seem to be coming from overall increases in the bilateral aid envelope, combined with declines in aid to Israel, Egypt, and Bosnia and Herzegovina. We do not find that any of our GWOT proxies (or their interactions) are significantly correlated with changes in country allocation of aid flows to the rest of the world, including to sub-Saharan African countries. Concerns that there is a large and systematic diversion of U.S. foreign aid from fighting poverty to fighting the GWOT do not so far appear to have been realized.

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Bibliographic Info

Paper provided by Center for Global Development in its series Working Papers with number 62.

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Length: 39 pages
Date of creation: Jul 2005
Date of revision:
Handle: RePEc:cgd:wpaper:62

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Web page: http://www.cgdev.org

Related research

Keywords: Global War on Terror (GWOT); September 11; foreign aid; terrorism; Iraq; muslim; poverty;

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Cited by:
  1. Dreher, Axel & Nunnenkamp, Peter & Öhler, Hannes, 2010. "Why it pays for aid recipients to take note of the millennium challenge corporation: Other donors do!," Center for European, Governance and Economic Development Research Discussion Papers 99, University of Goettingen, Department of Economics.
  2. Nasir, Muhammad & Rehman, Faiz Ur & Orakzai, Mejzgaan, 2012. "Exploring the nexus: Foreign aid, war on terror, and conflict in Pakistan," Economic Modelling, Elsevier, vol. 29(4), pages 1137-1145.
  3. Dreher, Axel & Nunnenkamp, Peter & Öhler, Hannes, 2010. "Why it pays for aid recipients to take note of the millennium challenge corporation: Other donors do!," Center for European, Governance and Economic Development Research Discussion Papers 99, University of Goettingen, Department of Economics.

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