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

Author

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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.

Suggested Citation

  • Todd Moss & David Roodman & Scott Standley, 2005. "The Global War on Terror and U.S. Development Assistance: USAID allocation by country, 1998-2005," Working Papers 62, Center for Global Development.
  • Handle: RePEc:cgd:wpaper:62
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    File URL: http://www.cgdev.org/content/publications/detail/2986
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    Cited by:

    1. repec:got:cegedp:99 is not listed on IDEAS
    2. Dreher, Axel & Nunnenkamp, Peter & Öhler, Hannes, 2012. "Why it pays for aid recipients to take note of the Millennium Challenge Corporation: Other donors do!," Economics Letters, Elsevier, vol. 115(3), pages 373-375.
    3. 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.

    More about this item

    Keywords

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

    JEL classification:

    • F35 - International Economics - - International Finance - - - Foreign Aid
    • N45 - Economic History - - Government, War, Law, International Relations, and Regulation - - - Asia including Middle East
    • F51 - International Economics - - International Relations, National Security, and International Political Economy - - - International Conflicts; Negotiations; Sanctions
    • F52 - International Economics - - International Relations, National Security, and International Political Economy - - - National Security; Economic Nationalism

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