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Does terror increase aid?

  • Axel Dreher

    (Heidelberg University)

  • Andreas Fuchs

    (Georg-August-University Göttingen)

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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Paper provided by Courant Research Centre PEG in its series Courant Research Centre: Poverty, Equity and Growth - Discussion Papers with number 86.

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Date of creation: 12 Aug 2011
Date of revision:
Handle: RePEc:got:gotcrc:086
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  1. Kilby, Christopher & Dreher, Axel, 2010. "The impact of aid on growth revisited: Do donor motives matter?," Economics Letters, Elsevier, vol. 107(3), pages 338-340, June.
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  17. Ai, Chunrong & Norton, Edward C., 2003. "Interaction terms in logit and probit models," Economics Letters, Elsevier, vol. 80(1), pages 123-129, July.
  18. Alberto Abadie, 2004. "Poverty, Political Freedom, and the Roots of Terrorism," NBER Working Papers 10859, National Bureau of Economic Research, Inc.
  19. Neumayer, Eric, 2002. "Is Good Governance Rewarded? A Cross-national Analysis of Debt Forgiveness," World Development, Elsevier, vol. 30(6), pages 913-930, June.
  20. Christopher Kilby, 2011. "Informal influence in the Asian Development Bank," The Review of International Organizations, Springer, vol. 6(3), pages 223-257, September.
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  24. Azam, Jean-Paul & Thelen, Véronique, 2007. "The Roles of Foreign Aid and Education in the War on Terror," IDEI Working Papers 449, Institut d'Économie Industrielle (IDEI), Toulouse.
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