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Aid and the Delegated Fight against Terrorism

  • Azam, Jean-Paul
  • Delacroix, Alexandra

A positive empirical relationship is found between the level of foreign aid received by a country and the number of terrorist attacks originating from it. A simple model is used to explain it, where the donor delegates some actions against terrorism to the aid-recipient government. Aid is endogenous in an econometric equation explaining participation in terrorist events, as expected from the model, and an attacks-supply curve in which aid has a negative impact is presented at the end. Copyright � 2006 The Authors; Journal compilation � 2006 Blackwell Publishing Ltd.

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Paper provided by Institut d'Économie Industrielle (IDEI), Toulouse in its series IDEI Working Papers with number 324.

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Date of creation: 2004
Date of revision: Jul 2005
Publication status: Published in Review of Development Economics, vol.�10, n°2, avril 2006, p.�330-344.
Handle: RePEc:ide:wpaper:3381
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  1. Nakamura, Alice & Nakamura, Masao, 1981. "On the Relationships among Several Specification Error Tests Presented by Durbin, Wu, and Hausman," Econometrica, Econometric Society, vol. 49(6), pages 1583-88, November.
  2. Svensson, J., 1995. "When Is Foreign Aid Policy Credible? Aid Dependence and Conditionality," Papers 600, Stockholm - International Economic Studies.
  3. 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.
  4. Azam, Jean-Paul & Laffont, Jean-Jacques, 2003. "Contracting for aid," Journal of Development Economics, Elsevier, vol. 70(1), pages 25-58, February.
  5. Svensson, Jakob, 2003. "Why conditional aid does not work and what can be done about it?," Journal of Development Economics, Elsevier, vol. 70(2), pages 381-402, April.
  6. C. S. Adam & S. A. O'Connell, 1999. "Aid, Taxation and Development in Sub-Saharan Africa," Economics and Politics, Wiley Blackwell, vol. 11(3), pages 225-253, November.
  7. Jean-Paul Azam, 2005. "Suicide-bombing as inter-generational investment," Public Choice, Springer, vol. 122(1), pages 177-198, January.
  8. Alesina, Alberto & Dollar, David, 2000. " Who Gives Foreign Aid to Whom and Why?," Journal of Economic Growth, Springer, vol. 5(1), pages 33-63, March.
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