While it is commonly assumed that the United States uses foreign aid as an instrument to combat global terrorism, it is unclear whether it views terrorist threats to other countries, particularly its allies, with urgency. We show that the relationship between transnational terrorism and foreign aid flows is strongly conditional on whether terrorist activity based in a potential recipient directly threatens the United States. Using data on terrorist attacks and casualties in potential recipient countries, we demonstrate that terrorist activity based within a state’s borders, which targets US interests is a strong determinant of both whether that state receives any aid and also how much aid it receives. In contrast, the presence of terrorism targeted at non-US interests, even if it targets formal allies of the United States, is generally unrelated to US aid allocation. These findings suggest that the United States' use of foreign aid to fight terrorism and political violence is narrowly tailored to assist countries that directly threaten its own security, rather than those of other countries, even its allies.
AiChunrongNortonEdward C.. 2003. “Interaction Terms in Logit and Probit Models.” Economics Letters80 (1): 123–29.
2.
ApodacaClairStohlMichael. 1999. “United States Human Rights Policy and Foreign Assistance.” International Studies Quarterly43 (1): 185–98.
3.
ArchickKristin. 2012. “U.S.-EU Cooperation Against Terrorism.” Technical report, The Congressional Research Service, Washington, DC.
4.
AronsonSamuel L.2011. “United States Aid to Kenya: A Study on Regional Security and Counterterrorism Assistance Before and After 9/11.” African Journal of Criminology and Justice5(1/2): S1–S2.
5.
AzamJean-PaulThelenVeronique. 2008. “The Roles of Foreign Aid and Education in the War on Terror.” Public Choice135:375–97.
6.
AzamJean-PaulThelenVeronique. 2010. “Foreign Aid versus Military Intervention in the War on Terror.” Journal of Conflict Resolution54 (2): 237–61.
7.
BandyopadhyaySubhayuSandlerToddYounasJaved. 2011. “Foreign Aid as Counterterrorism Policy.” Oxford Economic Papers63 (3): 423–47.
8.
BapatNavin A.2007. “The Internationalization of Terrorist Campaigns.” Conflict Management and Peace Science24 (4): 265–80.
9.
BapatNavin A.2011. “Transnational Terrorism, US Military Aid, and the Incentive to Misrepresent.” Journal of Peace Research48 (3): 303–18.
10.
BearceDavidTironeDaniel C.. 2010. “Foreign Aid Effectiveness and the Strategic Goals of Donor Governments.” Journal of Politics72 (3): 837–51.
11.
BoschiniAnneOlofsgardAnders. 2007. “Foreign Aid: An Instrument for Fighting Communism?”International Studies Quarterly43 (4): 622–48.
12.
Bueno de MesquitaBruceSmithAlastair. 2007. “Foreign Aid and Policy Concessions.” Journal of Conflict Resolution51 (2): 251–84.
13.
Bueno de MesquitaBruceSmithAlastair. 2009. “A Political Economy of Aid.” International Organization63:309–40.
14.
BymanDaniel. 2005. Deadly Connections: States that Sponsor Terrorism. Cambridge: Cambridge University Press.
15.
CameronColin A.TrivediPravin K.. 2005. Microeconometrics: Methods and Applications. Cambridge: Cambridge University Press.
16.
CarterDavid B.2012. “A Blessing or a Curse? State Support for Terrorist Groups.” International Organization66 (1): 129–51.
17.
CarterDavid B.SignorinoCurtis S.. 2010. “Back to the Future: Modeling Temporal Dependence in Binary Data.” Political Analysis18 (3): 271–92.
18.
CingranelliDavid L.PasquarelloThomas E.. 1985. “Human Rights and the Distribution of U.S. Foreign Aid to Latin American Countries.” American Journal of Political Science29 (3): 539–63.
19.
Congressional Research Service Report for Congress. 2005. “Foreign Aid: An Introductory Overview of U.S. Programs and Policy.” Technical report, The Library of Congress, Washington, DC.
20.
Demirel-PeggTijenMoskowitzJames. 2009. “U.S. Aid Allocation: The Nexus of Human Rights, Democracy, and Development.” Journal of Peace Research46 (2): 181–98.
21.
DreherAxelFuchsAndreas. 2011. “Rogue Aid? The Determinants of China’s Aid Allocation.” CESifo Working Paper No. 3581, Center for Economic Studies and Ifo Institute for Economic Research, Zurich, Switzerland.
22.
DunningThad. 2004. “Conditioning the Effects of Aid: Cold War Politics, Donor Credibility, and Democracy in Africa.” International Organization58:409–23.
23.
EasterlyWilliam. 2002. The Elusive Quest for Growth. Boston, MA: MIT Press.
24.
EndersWalterSandlerTodd. 1999. “Transnational Terrorism in the Post-Cold War Era.” International Studies Quarterly43:145–67.
25.
FleckRobert K.KilbyChristopher. 2010. “Changing Aid Regimes? U.S. Foreign Aid from the Cold War to the War on Terror.” Journal of Development Economics91:185–97.
GleditschKristian Skrede. 2002. “Expanded Trade and GDP Data.” Journal of Conflict Resolution46 (5): 712–24.
28.
GreeneWilliam. 2007. Econometric Analysis. 6th ed. New York: Prentice Hall.
29.
HoffmanBruce. 2006. Inside Terrorism: Revised and Expanded Edition. New York: Columbia University Press.
30.
IkenberryJohn G.2001. After Victory: Institutions, Strategic Restraint, and the Rebuilding of Order after Major Wars. Princeton, NJ: Princeton University Press.
31.
IkenberryJohn G.2011. Liberal Leviathan: The Origins, Crisis, and Transformation of the American World Order. Princeton, NJ: Princeton University Press.
32.
JonesSeth G.LibickiMartin C.. 2006. How Terrorist Groups End: Lessons for Countering Al Qaeda. Washington, DC: RAND.
33.
JudsonRuth A.OwenAnn L.. 1999. “Estimating Dynamic Panel Data Models: A Guide for Macroeconomists.” Economics Letters65:9–15.
34.
KupchanCharles. 2012. No One’s World: The West, The Rising Rest, and the Coming Global Turn. New York: Oxford University Press.
35.
LaiBrian. 2003. “Examining the Goals of U.S. Foreign Assistance in the Post-Cold War Period, 1991-1996.” Journal of Peace Research40 (1): 103–28.
36.
LakeDavid A.1999. Entangling Relations: American Foreign Policy in Its Century. Princeton, NJ: Princeton University Press.
37.
LakeDavid A.2007. “Escape from the State of Nature: Authority and Hierarchy in World Politics.” International Security32 (1): 47–79.
38.
LakeDavid A.2009a. Hierarchy in International Relations. Ithaca, NY: Cornell University Press.
39.
LakeDavid A.2009b. “Hobbesian Hierarchy: The Political Economy of Political Organization.” Annual Review of Political Science12:263–83.
40.
LebovicJames. 1988. “National Interests and U.S. Foreign Aid: The Carter and Reagan Years.” Journal of Peace Research25 (2): 115–35.
41.
LeedsBrett AshleyRitterJeffrey M.MitchellSara McLaughlinLongAndrew G.. 2002. “Alliance Treaty Obligations and Provisions, 1815-1944.” International Interactions28:237–60.
42.
LemkeDouglas. 2002. Regions of War and Peace. New York: Cambridge University Press.
43.
McClintockCynthiaVallasFabian. 2002. The United States and Peru: Cooperation—At a Cost. New York: Routledge.
44.
MearsheimerJohn J.1990. “Back to the Future: Instability in Europe after the Cold War.” International Security15 (1): 5–56.
45.
MeernikJamesKruegerEric L.PoeSteven C.. 1998. “Testing Models of U.S. Foreign Policy: Foreign Aid During and After the Cold War.” Journal of Politics60 (1): 63–85.
46.
MottWilliam H.2002. U.S. Military Assistance: An Empirical Perspective. Westport, CT: Greenwood.
47.
MuellerJohn. 2006. Overblown: How Politicians and the Terrorism Industry Inflate National Security Threats, and Why We Believe Them. New York: Free Press.
48.
MuscatRobert J.2002. Investing in Peace: How Development Aid Can Prevent or Promote Conflict. New York: M. E. Sharpe.
49.
National Priorities Project. 2011. “Cost of War.” Accessed August 19, 2011.http://costofwar.com/en/.
50.
NeumayerEricPlumperThomas. 2011. “Foreign Terror on Americans.” Journal of Peace Research48 (1): 3–17.
51.
PillarPaul R.2001. Terrorism and U.S. Foreign Policy. Washington, DC: Brookings Institution.
52.
PoeSteven C.MeernikJames. 1995. “U.S. Military Aid in the 1980s: A Global Analysis.” Journal of Peace Research32 (4): 399–411.
53.
SavunBurcuHaysJude. 2011. “Foreign Aid as a Counterterrorism Tool: State Capacity, NGOs, and Aid Channels.” Paper prepared to be presented at 2011 Visions in Methodology: A Workshop for Women in Political Methodology, Ohio State University, Columbus, OH, May 4–7, 2011.
54.
SchultzKenneth A.2010. “War as an Enforcement Problem: Interstate Conflict over Rebel Support in Civil Wars.” International Organization64 (2) 281–312.
55.
ShugartWilliam F.2006. “An Analytical History of Terrorism.” Public Choice128:7–39.
US Agency for International Development (USAID) Economic Analysis and Data Services. 2010. “U.S. Overseas Loans and Grants, Greenbook.” Technical report, United States Agency for International Development, Washington, DC.
58.
US Congress. 2008. “Foreign Aid and the Fight Against Terrorism and Proliferation: Leveraging Foreign Aid to Achieve U.S. Policy Goals.” 110th Congress, 2nd session, August 2008, 110-225.
59.
US Congress. 2009. “Enhanced Partnership with Pakistan Act.” 111th Congress, 1st session, October 15, 2009, S.1707.
60.
“U.S. Is Said to Expand Covert Operations in Iran Plan Allows Up to 400 Million for Activities Aimed at Destabilizing Government.” Washington Post, June30, 2008, 1.
World Bank. 2010. World Development Indicators Database. Washington, DC: The World Bank.
63.
WrightJoseph. 2008a. “How Foreign Aid Can Foster Democratization in Authoritarian Regimes.” American Journal of Political Science53 (3): 552–71.
64.
WrightJoseph. 2008b. “To Invest or Insure? How Authoritarian Time Horizons Impact Foreign Aid Effectiveness.” Comparative Political Studies41 (7): 971–1000.
65.
WrightJosephWintersMatthew. 2010. “The Politics of Effective Foreign Aid.” Annual Review of Political Science13:61–80.
66.
YoungJosephFindleyMike. 2011. “Can Peace be Purchased? A Sectoral-Level Analysis of Aids Influence on Transnational Terrorism.” Public Choice49(3/4):365–81.
Supplementary Material
Please find the following supplemental material available below.
For Open Access articles published under a Creative Commons License, all supplemental material carries the same license as the article it is associated with.
For non-Open Access articles published, all supplemental material carries a non-exclusive license, and permission requests for re-use of supplemental material or any part of supplemental material shall be sent directly to the copyright owner as specified in the copyright notice associated with the article.
