IDEAS home Printed from https://ideas.repec.org/p/got/gotcrc/086.html
   My bibliography  Save this paper

Does terror increase aid?

Author

Listed:
  • Axel Dreher

    (Heidelberg University)

  • Andreas Fuchs

    (Georg-August-University Göttingen)

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.

Suggested Citation

  • Axel Dreher & Andreas Fuchs, 2011. "Does terror increase aid?," Courant Research Centre: Poverty, Equity and Growth - Discussion Papers 86, Courant Research Centre PEG.
    • Handle: RePEc:got:gotcrc:086
    as

    Download full text from publisher

    File URL: http://www2.vwl.wiso.uni-goettingen.de/courant-papers/CRC-PEG_DP_86.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Macartan Humphreys, 2005. "Natural Resources, Conflict, and Conflict Resolution," Journal of Conflict Resolution, Peace Science Society (International), vol. 49(4), pages 508-537, August.
    2. Jean-Paul Azam & Véronique Thelen, 2008. "The roles of foreign aid and education in the war on terror," Public Choice, Springer, vol. 135(3), pages 375-397, June.
    3. Axel Dreher & Peter Nunnenkamp & Rainer Thiele, 2008. "Does Aid for Education Educate Children? Evidence from Panel Data," The World Bank Economic Review, World Bank Group, vol. 22(2), pages 291-314, April.
    4. Arellano, Manuel & Bover, Olympia, 1995. "Another look at the instrumental variable estimation of error-components models," Journal of Econometrics, Elsevier, vol. 68(1), pages 29-51, July.
    5. Martin Gassebner & Richard Jong‐A‐Pin & Jochen O. Mierau, 2011. "Terrorism And Cabinet Duration," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 52(4), pages 1253-1270, November.
    6. David Roodman, 2009. "How to do xtabond2: An introduction to difference and system GMM in Stata," Stata Journal, StataCorp LP, vol. 9(1), pages 86-136, March.
    7. 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.
    8. Hristos Doucouliagos & Martin Paldam, 2005. "Aid Effectiveness on Growth. A Meta Study," Economics Working Papers 2005-13, Department of Economics and Business Economics, Aarhus University.
    9. Alberto Abadie, 2006. "Poverty, Political Freedom, and the Roots of Terrorism," American Economic Review, American Economic Association, vol. 96(2), pages 50-56, May.
    10. Christopher Kilby, 2011. "Informal influence in the Asian Development Bank," The Review of International Organizations, Springer, vol. 6(3), pages 223-257, September.
    11. Azam, Jean-Paul & Thelen, Véronique, 2012. "Where to Spend Foreign Aid to Counter Terrorism," TSE Working Papers 12-316, Toulouse School of Economics (TSE).
    12. Fleck, Robert K. & Kilby, Christopher, 2010. "Changing aid regimes? U.S. foreign aid from the Cold War to the War on Terror," Journal of Development Economics, Elsevier, vol. 91(2), pages 185-197, March.
    13. Blundell, Richard & Bond, Stephen, 1998. "Initial conditions and moment restrictions in dynamic panel data models," Journal of Econometrics, Elsevier, vol. 87(1), pages 115-143, August.
    14. Alan B. Krueger & Jitka Maleckova, 2003. "Education, Poverty and Terrorism: Is There a Causal Connection?," Journal of Economic Perspectives, American Economic Association, vol. 17(4), pages 119-144, Fall.
    15. Simone Bertoli & Giovanni Andrea Cornia & Francesco Manaresi, 2007. "Aid performance and its determinants. A comparison of Italy with the OECD norm," Banca Nazionale del Lavoro Quarterly Review, Banca Nazionale del Lavoro, vol. 60(242), pages 271-321.
    16. Nauro F. Campos & Martin Gassebner, 2009. "International terrorism, political instability and the escalation effect," KOF Working papers 09-220, KOF Swiss Economic Institute, ETH Zurich.
    17. Neumayer, Eric, 2002. "Is Good Governance Rewarded? A Cross-national Analysis of Debt Forgiveness," World Development, Elsevier, vol. 30(6), pages 913-930, June.
    18. Axel Dreher & Andreas Fuchs, 2011. "Rogue Aid? The Determinants of China’s Aid Allocation," Courant Research Centre: Poverty, Equity and Growth - Discussion Papers 93, Courant Research Centre PEG, revised 29 Feb 2012.
    19. Gassebner, Martin & Jong-A-Pin, Richard & Mierau, Jochen O., 2008. "Terrorism and electoral accountability: One strike, you're out!," Economics Letters, Elsevier, vol. 100(1), pages 126-129, July.
    20. Jean‐Paul Azam & Alexandra Delacroix, 2006. "Aid and the Delegated Fight Against Terrorism," Review of Development Economics, Wiley Blackwell, vol. 10(2), pages 330-344, May.
    21. Subhayu Bandyopadhyay & Todd Sandler & Javed Younas, 2011. "Foreign aid as counterterrorism policy," Oxford Economic Papers, Oxford University Press, vol. 63(3), pages 423-447, July.
    22. Round, Jeffery I. & Odedokun, Matthew, 2004. "Aid effort and its determinants," International Review of Economics & Finance, Elsevier, vol. 13(3), pages 293-309.
    23. Navin A Bapat, 2011. "Transnational Terrorism, US Military Aid, and the Incentive to Misrepresent," Journal of Peace Research, Peace Research Institute Oslo, vol. 48(3), pages 303-318, May.
    24. Kilby, Christopher, 2009. "The political economy of conditionality: An empirical analysis of World Bank loan disbursements," Journal of Development Economics, Elsevier, vol. 89(1), pages 51-61, May.
    25. S. Blomberg & Khusrav Gaibulloev & Todd Sandler, 2011. "Terrorist group survival: ideology, tactics, and base of operations," Public Choice, Springer, vol. 149(3), pages 441-463, December.
    26. Ai, Chunrong & Norton, Edward C., 2003. "Interaction terms in logit and probit models," Economics Letters, Elsevier, vol. 80(1), pages 123-129, July.
    27. Christopher J. Coyne & Rachel L. Mathers (ed.), 2011. "The Handbook on the Political Economy of War," Books, Edward Elgar Publishing, number 13385.
    28. Windmeijer, Frank, 2005. "A finite sample correction for the variance of linear efficient two-step GMM estimators," Journal of Econometrics, Elsevier, vol. 126(1), pages 25-51, May.
    29. 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).
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Martin Gassebner & Simon Luechinger, 2011. "Lock, stock, and barrel: a comprehensive assessment of the determinants of terror," Public Choice, Springer, vol. 149(3), pages 235-261, December.
    2. Dreher, Axel & Jensen, Nathan M., 2013. "Country or leader? Political change and UN General Assembly voting," European Journal of Political Economy, Elsevier, vol. 29(C), pages 183-196.
    3. Azam, Jean-Paul & Thelen, Véronique, 2012. "Where to Spend Foreign Aid to Counter Terrorism," IDEI Working Papers 725, Institut d'Économie Industrielle (IDEI), Toulouse.
    4. Friedrich Schneider & Tilman Brück & Daniel Meierrieks, 2015. "The Economics Of Counterterrorism: A Survey," Journal of Economic Surveys, Wiley Blackwell, vol. 29(1), pages 131-157, February.
    5. Joseph Young & Michael Findley, 2011. "Can peace be purchased? A sectoral-level analysis of aid’s influence on transnational terrorism," Public Choice, Springer, vol. 149(3), pages 365-381, December.
    6. Redlin, Margarete & Gries, Thomas & Meierrieks, Daniel, 2014. "Oppressive Governments, US Closeness, and Anti-US Terrorism," VfS Annual Conference 2014 (Hamburg): Evidence-based Economic Policy 100588, Verein für Socialpolitik / German Economic Association.
    7. Uchenna Efobi & Simplice Asongu & Ibukun Beecroft, 2018. "Aid, Terrorism, and Foreign Direct Investment: Empirical Insight Conditioned on Corruption Control," International Economic Journal, Taylor & Francis Journals, vol. 32(4), pages 610-630, October.
    8. Axel Dreher & Martin Gassebner & Lars-H.R. Siemers, 2007. "Does Terror Threaten Human Rights? Evidence from Panel Data," KOF Working papers 07-156, KOF Swiss Economic Institute, ETH Zurich.
    9. Nauro F. Campos & Martin Gassebner, 2013. "International Terrorism, Domestic Political Instability, and the Escalation Effect," Economics and Politics, Wiley Blackwell, vol. 25(1), pages 27-47, March.
    10. Friedrich Schneider & Tilman Brück & Daniel Meierrieks, 2010. "The Economics of Terrorism and Counter-Terrorism: A Survey (Part II)," Discussion Papers of DIW Berlin 1050, DIW Berlin, German Institute for Economic Research.
    11. Kis-Katos, Krisztina & Liebert, Helge & Schulze, Günther G., 2014. "On the heterogeneity of terror," European Economic Review, Elsevier, vol. 68(C), pages 116-136.
    12. Azam, Jean-Paul & Thelen, Véronique, 2014. "Did the Aid Boom Pacify Sub-Saharan Africa?: Ex-Post Evaluation Using a Near-Identification Approach," TSE Working Papers 14-544, Toulouse School of Economics (TSE), revised Jun 2019.
    13. Javier Gardeazabal, 2011. "Linguistic polarization and conflict in the Basque Country," Public Choice, Springer, vol. 149(3), pages 405-425, December.
    14. Simplice Asongu & Jacinta Nwachukwu & Sara le Roux, 2019. "The role of inclusive development and military expenditure in modulating the effect of terrorism on governance," Journal of Economic Studies, Emerald Group Publishing, vol. 46(3), pages 681-709, August.
    15. Claude Berrebi & Jordan Ostwald, 2011. "Earthquakes, hurricanes, and terrorism: do natural disasters incite terror?," Public Choice, Springer, vol. 149(3), pages 383-403, December.
    16. Asongu, Simplice A. & Le Roux, Sara & Singh, Pritam, 2021. "Fighting terrorism in Africa: Complementarity between inclusive development, military expenditure and political stability," Journal of Policy Modeling, Elsevier, vol. 43(5), pages 897-922.
    17. Fløgstad, Cathrin N. & Nordtveit, Ingvild, 2014. "Lending to developing countries: How do official creditors respond to sovereign defaults?," Working Papers in Economics 01/14, University of Bergen, Department of Economics.
    18. Campos, Nauro F. & Gassebner, Martin, 2009. "International Terrorism, Political Instability and the Escalation Effect," IZA Discussion Papers 4061, Institute of Labor Economics (IZA).
    19. Raechelle Mascarenhas & Todd Sandler, 2014. "Remittances and terrorism: A global analysis," Defence and Peace Economics, Taylor & Francis Journals, vol. 25(4), pages 331-347, August.
    20. Kar, Ashim Kumar, 2016. "Aid and Human Development: Is There A Role for Good Policy Environment?," MPRA Paper 95433, University Library of Munich, Germany, revised 2018.

    More about this item

    Keywords

    Foreign aid; Transnational terrorism; War on Terror and aid; DAC donors; Heckman selection model;
    All these keywords.

    JEL classification:

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

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:got:gotcrc:086. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: . General contact details of provider: http://www.uni-goettingen.de/en/82144.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Dominik Noe (email available below). General contact details of provider: http://www.uni-goettingen.de/en/82144.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.