Aid and the delegated fight against terrorism

Abstract

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. © 2006 The Authors Journal compilation © 2006 Blackwell Publishing Ltd.