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It has been suggested that democratizing states are prone to civil wars. However, not all democratizing states experience domestic political violence. We argue that one of the key factors that "shelters" some democratizing states from domestic political violence is the receipt of democracy aid. Democratizing states that receive high levels of democracy assistance are less likely to experience civil conflict than countries that receive little or no external democracy assistance. During democratic transitions, the central authority weakens and uncertainty about future political commitments and promises among domestic groups increases. Democracy aid decreases the risk of conflict by reducing commitment problems and uncertainty. Using an instrumental variables approach that accounts for potential endogeneity problems in aid allocation, we find empirical support for our argument. We conclude that there is a potential path to democracy that ameliorates the perils of democratization, and democracy assistance programs can play a significant positive role in this process.T he recent scholarly debate over the "dark side of democratization" has generated substantial attention over the last decade (

The recent civil war literature suggests that negative economic shocks in low-income countries increase the risk of civil war. Foreign aid can be an effective conflict-prevention tool in times of severe economic conditions. Aid cushions government spending from the downward pressures of economic shocks, providing recipient governments with resources they can use to make rebellion a less attractive option for aggrieved domestic groups. Using Official Development Assistance (ODA) data covering 1990 through 2004, we find that foreign aid appears to be a useful tool for preventing civil wars in the wake of negative economic shocks, and as such aid should be assessed by donors with these conflict-suppressing aspects in mind.

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.

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