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Does terror increase aid?

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  • Axel Dreher

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  • Andreas Fuchs

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Abstract

This article empirically investigates whether, and in which ways, donors in the Development Assistance Committee respond to transnational terrorist incidents and the onset of the War on Terror through changes in aid effort and aid allocation. First, an analysis of 22 donor countries shows that aid effort increased during the War on Terror period, but did not respond to the actual number of terror events. Second, using aid allocation equations, we find that countries where terror originates are not more likely to receive aid as a consequence, but if they are selected, they receive larger amounts of aid.
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Suggested Citation

  • Axel Dreher & Andreas Fuchs, 2011. "Does terror increase aid?," Public Choice, Springer, vol. 149(3), pages 337-363, December.
    • Handle: RePEc:kap:pubcho:v:149:y:2011:i:3:p:337-363
    DOI: 10.1007/s11127-011-9878-8
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    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Bluhm, Richard & Gassebner, Martin & Langlotz, Sarah & Schaudt, Paul, 2016. "Fueling Conflict? (De)Escalation and Bilateral Aid," Working Papers 0619, University of Heidelberg, Department of Economics.
    2. Dreher, Axel & Gehring, Kai & Klasen, Stephan, 2015. "Gesture Politics or Real Commitment? Gender Inequality and the Allocation of Aid," World Development, Elsevier, vol. 70(C), pages 464-480.
    3. Langlotz, Sarah & Dreher, Axel, 2015. "Aid and growth. New evidence using an excludable instrument," Annual Conference 2015 (Muenster): Economic Development - Theory and Policy 112878, Verein für Socialpolitik / German Economic Association.
    4. Gnangnon, Sèna Kimm, 2017. "Structural economic vulnerability, openness and bilateral development aid flows," Economic Analysis and Policy, Elsevier, vol. 53(C), pages 77-95.
    5. Fuchs, Andreas & Dreher, Axel & Nunnenkamp, Peter, 2014. "Determinants of Donor Generosity: A Survey of the Aid Budget Literature," World Development, Elsevier, vol. 56(C), pages 172-199.
    6. Subhayu Bandyopadhyay & E. Katarina Vermann, 2013. "Donor motives for foreign aid," Review, Federal Reserve Bank of St. Louis, issue July, pages 327-336.
    7. Todd Sandler, 2011. "The many faces of counterterrorism: an introduction," Public Choice, Springer, vol. 149(3), pages 225-234, December.
    8. Langlotz, Sarah & Potrafke, Niklas, 2016. "Does development aid increase military expenditure?," Working Papers 0618, University of Heidelberg, Department of Economics.
    9. Öhler, Hannes, 2013. "Do Aid Donors Coordinate Within Recipient Countries?," Working Papers 539, University of Heidelberg, Department of Economics.
    10. Baulch, Bob & Tam, Le Vi An, 2013. "The Progressivity and Regressivity of Aid to the Social Sectors," WIDER Working Paper Series 075, World Institute for Development Economic Research (UNU-WIDER).
    11. 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.
    12. Stubbs, Thomas H. & Kentikelenis, Alexander E. & King, Lawrence P., 2016. "Catalyzing Aid? The IMF and Donor Behavior in Aid Allocation," World Development, Elsevier, vol. 78(C), pages 511-528.
    13. Paul Bezerra & Alex Braithwaite, 2016. "Locating foreign aid commitments in response to political violence," Public Choice, Springer, vol. 169(3), pages 333-355, December.
    14. Axel Dreher & Andreas Fuchs, 2011. "Does terror increase aid?," Public Choice, Springer, vol. 149(3), pages 337-363, December.
    15. Axel Dreher & Valentin F. Lang & Sebastian Ziaja, 2017. "Foreign Aid in Areas of Limited Statehood," CESifo Working Paper Series 6340, CESifo Group Munich.
    16. repec:eee:poleco:v:53:y:2018:i:c:p:186-204 is not listed on IDEAS
    17. Alessandro De Matteis, 2016. "Whose poverty really matters when deciding aid volumes?," International Journal of Public Policy, Inderscience Enterprises Ltd, vol. 12(1/2), pages 28-53.
    18. Azam, Jean-Paul & Thelen, Véronique, 2012. "Where to Spend Foreign Aid to Counter Terrorism," TSE Working Papers 12-316, Toulouse School of Economics (TSE).
    19. repec:bla:afrdev:v:29:y:2017:i:3:p:376-388 is not listed on IDEAS
    20. Jonathan Benchimol & Makram El-Shagi, 2017. "Forecast Performance in Times of Terrorism," CFDS Discussion Paper Series 2017/1, Center for Financial Development and Stability at Henan University, Kaifeng, Henan, China.

    More about this item

    Keywords

    Foreign aid; Transnational terrorism; War on Terror and aid; DAC donors; Heckman selection model; F35;

    JEL classification:

    • F35 - International Economics - - International Finance - - - Foreign Aid

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