Foreign Aid as Counterterrorism Policy

Abstract

This paper presents a model where foreign aid bolsters a developing country's proactive counterterrorism efforts against a resident transnational terrorist group. In stage 1 of the game, the donor country allocates resources to terrorism-fighting tied aid, general assistance, and defensive actions at home. The recipient country then decides its proactive campaign against the common terrorist threat in stage 2, while the terrorists direct their attacks against the donor and recipient countries in stage 3. Terrorists' choices in the final stage provide a solid microfoundation for the terrorists' likelihood of success function. In stage 2, greater tied aid raises the recipient country's proactive measures and regime instability, while increased general aid reduces these proactive efforts and regime instability. In stage 1, a donor's homeland security decisions are interdependent with its aid package to a recipient country, hosting resident transnational terrorists. This interdependency has gone unrecognized to date. JEL classification: H40, O10, D74

Terrorist group survival: ideology, tactics, and base of operations

“…Transnational terrorist attacks are, ceteris paribus, more risky than domestic attacks because borders may have to be crossed by the terrorists or supplies necessary to attack their target. In addition, transnational terrorist events motivate other impacted governments to bolster counterterrorism actions either through their own measures or with foreign aid (Bandyopadhyay et al 2011;Fleck and Kilby 2010). Finally, environmental considerations-e.g., regional location, trade openness, regime type, and group ideology-may have positive or negative influences on the marginal probability of success.…”

Earthquakes, hurricanes, and terrorism: do natural disasters incite terror?

“…The existing literature has noted that disasters tend to disproportionately affect marginalized or disempowered groups (Albala-Bertrand 1993;Bolin 2007;Cohen and Werker 2008;Mustafa 1998). Along similar lines, the distribution of aid has also been a focus of much research within terrorism literature (Azam and Delacroix 2006;Azam and Thelen 2008;Bandyopadhyay et al 2011;Basuchoudhary and Shughart 2010). Unequal relief efforts or aid allocation present additional avenues through which natural disasters could affect terrorism.…”

Donor Motives for Foreign Aid

“…The authors show that if the volume of initial aid is large enough, then further increases in aid must reduce immigration. Bandyopadhyay, Sandler, and Younas (2011) evaluate the effect of aid on terrorism. They show that it may be in the interest of developed nations to provide foreign aid to developing nations to help alleviate terrorism-related threats.…”