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Changing Aid Regimes? U.S. Foreign Aid from the Cold War to the War on Terror

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Author Info
Fleck, Robert K. () (Montana State University Department of Agricultural Economics and Economics)
Kilby, Christopher () (Department of Economics and Statistics, Villanova School of Business, Villanova University)

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Abstract

This paper explores how U.S. bilateral economic aid has or has not changed with the advent of the War on Terror. In particular, has the renewed geopolitical role of aid coincided with a reduction of aid to the poorest countries or less weight on need in U.S. aid allocation decisions? We start with an analysis of annual U.S. aid budgets from 1955 to 2006. Controlling for domestic political and economic conditions, we find that the impact of the War on Terror on the aid budget is significantly larger than is immediately apparent. To explore how the emphasis on need may have changed over time, we use country-level panel data on aid allocations to 119 countries across the same time period. This shows that U.S. aid flows – for the poorest as well as other developing countries – increased with the War on Terror. However, after rising for 35 years, the emphasis placed on need has been falling steadily for core aid recipients during the War on Terror.

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Paper provided by Villanova School of Business Department of Economics and Statistics in its series Villanova School of Business Department of Economics and Statistics Working Paper Series with number 1.

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Date of creation: Mar 2009
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Handle: RePEc:vil:papers:1

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Web page: http://www.villanova.edu/business/facultyareas/economics/
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Related research
Keywords: Cold War; Foreign Aid; United States; War on Terror;

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Find related papers by JEL classification:
F35 - International Economics - - International Finance - - - Foreign Aid

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  1. Ball, Richard & Johnson, Christopher, 1996. "Political, Economic, and Humanitarian Motivations for PL 480 Food Aid: Evidence from Africa," Economic Development and Cultural Change, University of Chicago Press, vol. 44(3), pages 515-37, April.
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    Other versions:
  6. Berthelemy, Jean-Claude & Tichit, Ariane, 2002. "Bilateral Donors' Aid Allocation Decisions: A Three-dimensional Panel Analysis," Working Papers UNU-WIDER Research Paper , World Institute for Development Economic Research (UNU-WIDER). [Downloadable!]
    Other versions:
  7. Round, Jeffery I. & Odedokun, Matthew, 2004. "Aid effort and its determinants," International Review of Economics & Finance, Elsevier, vol. 13(3), pages 293-309. [Downloadable!] (restricted)
  8. Round, Jeffery I. & Odedokun, Matthew, 2003. "Aid Effort and its Determinants," Working Papers UNU-WIDER Research Paper , World Institute for Development Economic Research (UNU-WIDER). [Downloadable!]
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    Other versions:
  10. Noel, Alain & Therien, Jean-Philippe, 1995. "From Domestic to International Justice: The Welfare State and Foreign Aid," International Organization, MIT Press, vol. 49(3), pages 523-53, Summer.
  11. Beenstock, Michael, 1980. "Political econometry of official development assistance," World Development, Elsevier, vol. 8(2), pages 137-144, February. [Downloadable!] (restricted)
  12. Pallage, Stephane & Robe, Michel A, 2001. "Foreign Aid and the Business Cycle," Review of International Economics, Blackwell Publishing, vol. 9(4), pages 641-72, November. [Downloadable!] (restricted)
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  13. Markus Goldstein & Todd Moss, 2005. "Compassionate conservatives or conservative compassionates? US political parties and bilateral foreign assistance to Africa," The Journal of Development Studies, Taylor and Francis Journals, vol. 41(7), pages 1288-1302, October. [Downloadable!] (restricted)
  14. Ilyana Kuziemko & Eric Werker, 2006. "How Much Is a Seat on the Security Council Worth? Foreign Aid and Bribery at the United Nations," Journal of Political Economy, University of Chicago Press, vol. 114(5), pages 905-930, October. [Downloadable!] (restricted)
  15. Robert K. Fleck & Christopher Kilby, 2001. "Foreign Aid and Domestic Politics: Voting in Congress and the Allocation of USAID Contracts across Congressional Districts," Southern Economic Journal, Southern Economic Association, vol. 67(3), pages 598-617, January.
    Other versions:
  16. Odedokun, Matthew, 2003. "Analysis of Deviations and Delays in Aid Disbursements," Working Papers UNU-WIDER Research Paper , World Institute for Development Economic Research (UNU-WIDER). [Downloadable!]
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