Is foreign aid effective in reducing terrorism? The existing evidence is mostly negative. We argue that this pessimistic outlook on the efficacy of aid as a counterterrorism tool is partly a function of focusing on only one type of aid: economic aid. Governance and civil society aid can dampen the participation in and support for terrorism by altering the political conditions of a country. We expect countries that receive high levels of governance and civil society aid to experience fewer domestic terrorist incidents than countries that receive little or none. Using a sample of aid eligible countries for the period from 1997 to 2010, we find that governance and civil society aid is effective in dampening domestic terrorism, but this effect is only present if the recipient country is not experiencing a civil conflict. Our findings provide support for the continued use of democracy aid as a counterterrorism tool.
AbadieAlberto. 2006. “Poverty, Political Freedom, and the Roots of Terrorism.” The Economics and National Security96 (2): 50–56.
2.
AbrahmsMax. 2007. “Why Democracies Make Superior Counterterrorists?” Security Studies16 (2): 223–53.
3.
AksoyDenizCarterDavidWrightJoseph. 2012. “Terrorism in Dictatorships.” Journal of Politics74 (3): 810–26.
4.
AlesinaAlbertoDollarDavid. 2000. “Who Gives Foreign Aid to Whom and Why?” Journal of Economic Growth5 (1): 33–63.
5.
AzamJean-PaulThelenVéronique. 2006. “Aid and the Delegated Fight against Terrorism.” Review of Development Economics10 (2): 330–44.
6.
AzamJean-PaulThelenVéronique. 2008. “The Roles of Foreign Aid and Education in the War on Terror.” Public Choice135 (3/4): 375–97.
7.
BandyopadhyaySubhayuSandlerToddYounasJaved. 2011. “Foreign Aid as Counterterrorism Policy.” Oxford Economic Papers63 (3): 423–47.
8.
BandyopadhyaySubhayuSandlerToddYounasJaved. 2014. “Foreign Direct Investment, Aid, and Terrorism.” Oxford Economic Papers6 (1): 25–50.
9.
BaronReubenDavidKenny. 1986. “The Moderator-mediator Variable Distinction in Social Psychological Research—Conceptual, Strategic, and Statistical Considerations.” Journal of Personality and Social Psychology51 (6): 1173–82.
10.
BearceDavid H.TironeDaniel C.. 2010. “Foreign Aid Effectiveness and the Strategic Goals of Donor Governments.” The Journal of Politics72 (3): 837–51.
11.
BellSamClayChadMurdieAmandaPiazzaJames. 2014. “Opening Yourself Up: The Role of External and Internal Transparency in Terrorism Attacks.” Political Research Quarterly67 (3): 603–14.
12.
BerrebiClaude. 2007. “Evidence about the Link Between Education, Poverty and Terrorism among Palestinians.” Peace Economics, Peace Science and Public Policy13 (1): 1–36.
13.
BlairGraemaFairChristineMalhotraNeilShapiroJacob. 2013. “Poverty and Support for Militant Politics: Evidence from Pakistan.” American Journal of Political Science57 (1): 30–48.
14.
BlombergS. BrockHessGregory. 2008. “From (No) Butter to Guns? Understanding the Economic Role in Transnational Terrorism.” In Terrorism, Economic Development and Political Openness, edited by KeeferPhilipLoayzaNorman, 83–115. Cambridge, UK: Cambridge University Press.
15.
BravoAna Bela SantosDiasCarlos Manuel Mendes. 2006. “An Empirical Analysis of Terrorism: Deprivation, Islamism and Geopolitical Factors.” Defence and Peace Economics17 (4): 329–41.
16.
Bueno de MesquitaEthan. 2005. “The Quality of Terror.” American Journal of Political Science49 (3): 515–30.
17.
BurgoonBrian. 2006. “On Welfare and Terror: Social Welfare Policies and the Political-economic Roots of Terrorism.” Journal of Conflict Resolution50 (2): 176–203.
18.
CarothersThomas. 1999. Aiding Democracy Abroad: The Learning Curve. Washington, DC: Carnegie Endowment for International Peace.
19.
ChoiSeung-Whan. 2010. “Fighting Terrorism through the Rule of Law?” Journal of Conflict Resolution54 (6): 940–66.
ClemensMichael A.RadeletStevenBhavnaniRikhil R.BazziSamuel. 2012. “Counting Chickens When They Hatch: Timing and the Effects of Aid on Growth.” The Economic Journal122 (561): 590–617.
22.
CoppedgeMichaelGerringJohnAltmanDavidBernhardMichaelFishStevenHickenAllenKroenigMatthewLindbergStaffan IMcMannKellyPaxtonPamelaSemetkoHolli ASkaaningSvend-ErikStatonJeffreyTeorellJan. 2011. “Conceptualizing and Measuring Democracy: A New Approach.” Perspectives on Politics9 (2): 247–67.
23.
CrenshawMartha. 1981. “The Causes of Terrorism.” Comparative Politics13 (4): 379–99.
24.
DahlRobert A.1956. A Preface to Democratic Theory. Chicago, IL: University of Chicago Press.
25.
DiamondLarry. 1995. Promoting Democracy in the 1990s: Actors and Instruments, Issues and Imperatives. New York: Carnegie Corporation of New York.
26.
DietrichSimone. 2011. “The Politics of Health Aid: Why Corrupt Governments Have Incentives to Implement Aid Effectively.” World Development39 (1): 55–63.
27.
DietrichSimone. 2013. “Bypass or Engage? Explaining Donor Delivery Tactics in Aid Allocation.” International Studies Quarterly57 (4): 698–712.
28.
DjankovSimeonMontalvoJose G.Reynal-QuerolMarta. 2008. “The Curse of Aid.” Journal of Economic Growth13 (3): 169–94.
29.
DreherAxelFuchsAndreas. 2011. “Does Terror Increase Aid.” Public Choice149 (3/4): 337–63.
30.
DunningThad. 2004. “Conditioning the Effects of Aid: Cold War Politics, Donor Credibility, and Democracy in Africa.” International Organization58 (2): 409–23.
31.
EndersWalterHooverGarySandlerTodd. 2016. “The Changing Nonlinear Relationship between Income and Terrorism.” Journal of Conflict Resolution60 (2): 195–225.
32.
EndersWalterSandlerTodd. 2006. The Political Economy of Terrorism. Cambridge, UK: Cambridge University Press.
33.
EndersWalterSandlerToddGaibulloevKhusrav. 2011. “Domestic versus Transnational Terrorism: Data, Decomposition, and Dynamics.” Journal of Peace Research48 (3): 319–37.
34.
EubankWilliamWeinbergLeonard. 2001. “Terrorism and Democracy: Perpetrators and Victims.” Terrorism and Political Violence13 (1): 135–64.
35.
EyermanJoe. 1998. “Terrorism and Democratic States: Soft Targets or Accessible Systems.” International Interactions24 (2): 151–70.
36.
FindleyMichael G.YoungJoseph K.. 2012. “Terrorism and Civil War: A Spatial and Temporal Approach to a Conceptual Problem.” Perspectives on Politics10 (2): 285–305.
37.
FinkelStevenPérez-LiñánAníbalSeligsonMitchell. 2007. “The Effects of U.S. Foreign Assistance on Democracy Building, 1990-2003.” World Politics59 (3): 404–39.
38.
FranciscoRonald. 1995. “The Relationship between Coercion and Protest: An Empirical Evaluation in Three Coercive States.” Journal of Conflict Resolution39 (2): 263–82.
39.
FortnaVirginia Page. 2015. “Do Terrorists Win? Rebels’ Use of Terrorism and Civil War Outcomes.” International Organization69 (3): 519–56.
40.
GassebnerMartinLuechingerSimon. 2011. “Lock, Stock, and Barrel: A Comprehensive Assessment of the Determinants of Terror.” Public Choice149 (3/4): 235–61.
41.
GleditschNils PetterWallensteenPeterErikssonMikaelSollenbergMargaretaStrandHåvard. 2002. “Armed Conflict 1946-2001: A New Dataset.” Journal of Peace Research39 (5): 615–37.
42.
HamiltonLawrence C.HamiltonJames D.. 1983. “Dynamics of Terrorism.” International Studies Quarterly27 (1): 39–54.
43.
HansenHenrikTarpFinn. 2001. “Aid and Growth Regressions.” Journal of Development Economics64 (2): 547–70.
44.
HayesAndrew. 2013. Introduction to Mediation, Moderation, and Conditional Process Analysis: A Regression-based Approach. New York: Guilford Press.
45.
HeldDavid. 1996. Models of Democracy. Stanford, CA: Stanford University Press.
46.
KalyvitisSarantisVlachakiIrene. 2010. “Democratic Aid and the Democratization of Recipients.” Contemporary Economic Policy28 (2): 188–218.
47.
KnackStephen. 2001. “Aid Dependence and the Quality of Governance: Cross-country Empirical Tests.” Southern Economic Journal68 (2): 310–29.
48.
KnackStephen. 2004. “Does Foreign Aid Promote Democracy?” International Studies Quarterly48 (1): 251–66.
49.
KruegerAlan B.2007. What Makes a Terrorist: Economics and the Roots of Terrorism. Princeton, NJ: Princeton University Press.
50.
KruegerAlan B.LaitinDavid D.. 2008. “Kto Kogo? A Cross-country Study of the Origins and the Targets of Terrorism.” In Terrorism, Economic Development and Political Openness, edited by KeeferPhillipLoayzaNorman, 148–73. Cambridge, UK: Cambridge University Press.
51.
KruegerAlan B.MaleckovaJitka. 2003. “Education, Poverty and Terrorism: Is there a Causal Connection?” Journal of Economic Perspectives17 (4): 119–44.
52.
Kurrild-KlitgaardPeterJustesenMogens K.KlemmensenRobert. 2006. “The Political Economy of Freedom, Democracy, and Transnational Terrorism.” Public Choice128 (1/2): 289–315.
53.
KyddAndrewWalterBarbara. 2006. “The Strategies of Terrorism.” International Security31 (1): 49–80.
54.
LiQuan. 2005. “Does Democracy Promote or Reduce Transnational Terrorist Incidents?” Journal of Conflict Resolution49 (2): 278–97.
55.
LiQuanSchaubDrew. 2004. “Economic Globalization and Transnational Terrorism.” Journal of Conflict Resolution48 (2): 230–58.
56.
MarshallMonty G.JaggersKeithGurrTed Robert. 2011. Polity IV Project: Dataset Users’ Manual. Center for Systemic Peace: Polity IV Project, Vienna, VA.
57.
National Consortium for the Study of Terrorism and Responses to Terrorism (START). 2012. “Global Terrorism Database [Data file].” Accessed April 8, 2013. http://www.start.umd.edu/gtd.
OECD [Organisation for Economic Co-operation and Development]. 2010. “Reporting Directives for the Creditor Reporting System.” Accessed March 20, 2014. https://www1.oecd.org/dac/stats/45917783.pdf.
60.
OppKarl-DieterRoehlWolfgang. 1990. “Repression, Micromobilization and Political Protest.” Social Forces69 (2): 521–47.
61.
PiazzaJames. 2006. “Rooted in Poverty? Terrorism, Poor Economic Development and Social Cleavages.” Terrorism and Political Violence18 (1): 159–77.
62.
PiazzaJames. 2011. “Poverty, Minority Economic Discrimination and Domestic Terrorism.” Journal of Peace Research48 (3): 339–53.
63.
PiazzaJames. 2017. “Repression and Terrorism: A Cross-national Empirical Analysis of Types of Repression and Domestic Terrorism.” Terrorism and Political Violence29 (1): 1–17.
64.
RadeletSteven. 2004. “Aid Effectiveness and the Millennium Development Goals. Center for Global Development.” Working Paper Number 39, Washington, DC.
65.
RajanRaghuram G.SubramanianArvind. 2008. “Aid and Growth: What Does the Cross-country Evidence Really Show?” The Review of Economics and Statistics90 (4): 643–65.
66.
RossJeffery Ian. 1993. “Structural Causes of Oppositional Political Terrorism: A Causal Model.” Journal of Peace Research30 (3): 317–29.
67.
RotbergRobert. 2002. “Failed States in a World of Terror.” Foreign Affairs81 (July/August): 127–40.
68.
SambanisNicolas. 2012. “Terrorism and Civil War.” In Terrorism, Economic Development and Political Openness, edited by KeeferPhilipLoayzaNorman,174–206. New York: Cambridge University Press.
69.
San-AkcaBelgin. 2014. “Democracy and Vulnerability: An Exploitation Theory of Democracies by Terrorists.” Journal of Conflict Resolution58 (7): 1285–310.
70.
Sánchez-CuencaIgnaciode la CalleLuis. 2009. “Domestic Terrorism: The Hidden Side of Political Violence.” Annual Review of Political Science12: 31–49.
71.
SavunBurcuPhillipsBrian J.. 2009. “Democracy, Foreign Policy, and Terrorism.” Journal of Conflict Resolution53 (6): 878–904.
72.
SavunBurcuTironeDaniel C.. 2011. “Foreign Aid, Democratization, and Civil Conflict: How does Democracy Aid Affect Civil Conflict?” 2011. American Journal of Political Science55 (2): 233–46.
73.
ScottJames M.SteeleCarie A.. 2011. “Sponsoring Democracy: The United States and Democracy Aid to the Developing World, 1988-2001.” International Studies Quarterly55 (1): 47–69.
74.
ShapiroJacobFairChristine. 2010. “Understanding Support for Islamist Militancy in Pakistan.” International Security34 (3): 79–118.
75.
StantonJessica A.2013. “Terrorism in the Context of Civil War.” Journal of Politics75 (4): 1009–22.
76.
TestasAbdelaziz. 2004. “Determinants of Terrorism in the Muslim World: An Empirical Cross-sectional Analysis.” Terrorism and Political Violence16 (2): 253–73.
TierneyMichael J.NielsonDaniel L.HawkinsDarren G.Timmons RobertsJ.FindleyMichael G.PowersRyan M.ParksBradleyWilsonSven E.HicksRobert L.. 2011. “More Dollars than Sense: Refining Our Knowledge of Development Finance Using AidData.” World Development39 (11): 1891–906.
79.
VreelandJames Raymond. 2008. “The Effect of Political Regime on Civil War: Unpacking Anocracy.” Journal of Conflict Resolution52 (3): 401–25.
80.
WalshJamesPiazzaJames. 2010. “Why Respecting Physical Integrity Rights Reduces Terrorism.” Comparative Political Studies43 (5): 551–77.
81.
WilkinsonPaul. 2011. Terrorism versus Democracy: The Liberal State Response. New York: Routledge.
82.
WilsonMatthewPiazzaJames A.. 2013. “Conditioning Effects of Authoritarian Regime-type on Terrorist Attacks.” American Journal of Political Science57 (4): 941–55.
83.
WindsorJennifer. 2003. “Promoting Democratization Can Combat Terrorism.” The Washington Quarterly26 (3): 43–58.
84.
WintersMatthewsWrightJoseph. 2010. “The Politics of Effective Foreign Aid.” Annual Review of Political Science13:61–80.
85.
WrightJoseph. 2009. “How Foreign Aid Can Foster Democratization in Authoritarian Regimes.” American Journal of Political Science53 (3): 552–71.
86.
WrightJosephDietrichSimoneAriottiMolly. 2015. “Foreign Aid and Judicial Independence.” Working Paper.
87.
YoungJosephFindleyMichael. 2011. “Can Peace be purchased? A Sectoral-level Analysis of Aid’s Influence on Transnational Terrorism.” Public Choice149 (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.
