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Foreign Aid Designed to Diminish Terrorist Atrocities can Increase Them

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Author Info
Mandler, Michael
Spagat, Michael

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Abstract

A domestic power faces an enemy and commits terrorist atrocities to increase the likelihood of victory. A foreign patron can grant aid to the power but prefers fewer or no atrocities. The domestic power responds by acquiescing in the creation of uncontrollable paramilitaries that commit even more atrocities. Once the paramilitaries are set up, aid flows and the atrocity level is high. Now suppose the foreign patron is uncertain whether the domestic power can control the paramilitaries. At a pooling equilibrium the home government will commit more atrocities than it would commit in isolation to demonstrate to the foreign patron that the paramilitaries are beyond the domestic power’s control. Case studies of Colombia, Northern Ireland, and the Middle East illustrate the models.

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Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 4004.

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Date of creation: Aug 2003
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Handle: RePEc:cpr:ceprdp:4004

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Related research
Keywords: civil conflict; foreign aid; human rights; paramilitaries; signalling; terrorist atrocities;

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Find related papers by JEL classification:
D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances
D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information

References listed on IDEAS
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    Other versions:
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  5. Lapan, Harvey E. & Sandler, Todd, 2003. "Terrorism and Signalling," Staff General Research Papers 10808, Iowa State University, Department of Economics.
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  10. Gregory D. Hess & Athanasios Orphanides, 2001. "War and Democracy," Journal of Political Economy, University of Chicago Press, vol. 109(4), pages 776-810, August. [Downloadable!] (restricted)
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  11. Overgaard, P.B., 1993. "The Scale of Terrorist Attacks as a Signal of Ressources," Economics Working Papers 1993-20, School of Economics and Management, University of Aarhus.
  12. Grossman, Herschel I, 1994. "Production, Appropriation, and Land Reform," American Economic Review, American Economic Association, vol. 84(3), pages 705-12, June. [Downloadable!] (restricted)
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  1. Jorge Restrepo, Michael Spagat and Juan Vargas, 2003. "The Dynamics of the Colombian Civil Conflict: A New Data Set," Royal Holloway, University of London: Discussion Papers in Economics 03/12, Department of Economics, Royal Holloway University of London, revised Dec 2003. [Downloadable!]
    Other versions:
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