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Aid in times of terror

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  • Prabal Roy Chowdhury

    ()
    (Indian Statistical Institute, New Delhi)

  • Jaideep Roy

    ()
    (University of Birmingham)

Abstract

In a scenario where terrorist organizations, based in an LDC, target a rich nation, we examine a joint, multi-pronged and dynamic counter-terror strategy and the role that developmental aid plays in its success. We show that aid-tying leads to a fruitful virtuous cycle whereby joint counter-terror operations help in the observability of aid delivery, and aid in its turn makes greater counter-terror possible. Further, the counter-terror operations must be the largest possible at the very beginning. We argue that it is not necessarily the case that a more hawkish donor is less pro-development, or that a more altruistic donor is softer on terror. Moreover, we identify channels through which international diplomacy aimed at reducing regional hostility can help in the war against terror.

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Bibliographic Info

Paper provided by Indian Statistical Institute, New Delhi, India in its series Indian Statistical Institute, Planning Unit, New Delhi Discussion Papers with number 11-08.

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Length: 32 pages
Date of creation: Jul 2011
Date of revision:
Handle: RePEc:ind:isipdp:11-08

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Keywords: Developmental Aid; Terror; Aid-tying; Joint Counter-terror Operations; Diplomacy;

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  1. Das, Satya P. & Roy Chowdhury, Prabal, 2008. "Deterrence, Preemption and Panic: A Common-Enemy Problem of Terrorism," MPRA Paper 8223, University Library of Munich, Germany.
  2. Jody Overland, Kenneth Simons and Michael Spagat, 2003. "Political Instability and Growth in Dictatorships," Royal Holloway, University of London: Discussion Papers in Economics, Department of Economics, Royal Holloway University of London 03/11, Department of Economics, Royal Holloway University of London, revised Dec 2003.
  3. David Locke Newhouse & Prachi Mishra, 2007. "Health Aid and Infant Mortality," IMF Working Papers 07/100, International Monetary Fund.
  4. Mirza, Daniel & Verdier, Thierry, 2006. "International trade, security, and transnational terrorism : theory and empirics," Policy Research Working Paper Series 4093, The World Bank.
  5. C. S. Adam & S. A. O'Connell, 1999. "Aid, Taxation and Development in Sub-Saharan Africa," Economics and Politics, Wiley Blackwell, Wiley Blackwell, vol. 11(3), pages 225-253, November.
  6. World Bank, 2004. "Strategic Framework for Assistance to Africa : IDA and the Emerging Partnership Model," World Bank Publications, The World Bank, number 15179, October.
  7. Subhayu Bandyopadhyay & Todd Sandler & Javed Younas, 2009. "Foreign aid as counterterrorism policy," Working Papers 2009-021, Federal Reserve Bank of St. Louis.
  8. Sajal Lahiri & Pascalis Raimondos-Møller, 2004. "Donor Strategy under the Fungibility of Foreign Aid," Economics and Politics, Wiley Blackwell, Wiley Blackwell, vol. 16(2), pages 213-231, 07.
  9. Azam, Jean-Paul & Thelen, Véronique, 2009. "Foreign Aid vs. Military Intervention in the War on Terror," TSE Working Papers 09-061, Toulouse School of Economics (TSE).
  10. van de Walle, Dominique & Ren Mu, 2007. "Fungibility and the flypaper effect of project aid : micro-evidence for Vietnam," Policy Research Working Paper Series 4133, The World Bank.
  11. Abadie, Alberto & Gardeazabal, Javier, 2005. "Terrorism and the World Economy," DFAEII Working Papers 2005-19, University of the Basque Country - Department of Foundations of Economic Analysis II.
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