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When is Foreign Aid Effective in Fighting Terrorism? Threshold Evidence

Author

Listed:
  • Asongu, Simplice
  • Ssozi, John
Abstract
Building on previous literature, we assess when foreign aid is effective in fighting terrorism using quantile regressions on a panel of 78 developing countries for the period 1984-2008. Bilteral, multilateral and total aid indicators are used whereas terrorism includes: domestic, transnational, unclear and total terrorism dynamics. We consistently establish that foreign aid (bilateral, multilateral and total) is effective at fighting terrorism exclusively in countries where existing levels of transnational terrorism are highest. This finding is consistent with our theoretical underpinnings because donors have been documented to allocate more aid towards fighting transnational terrorist activities in recipient countries because they are more likely to target their interests. Moreover, the propensity of donor interest at stake is likely to increase with initial levels of transnational terrorism, such that the effect of foreign aid is most significant in recipient countries with the highest levels of transnational terrorism. Policy implications and future research directions are discussed.

Suggested Citation

  • Asongu, Simplice & Ssozi, John, 2015. "When is Foreign Aid Effective in Fighting Terrorism? Threshold Evidence," MPRA Paper 68654, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:68654
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    References listed on IDEAS

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    Cited by:

    1. Simplice Asongu & Ivo J. Leke, 2019. "Can Foreign Aid Dampen the Threat of Terrorism to International Trade? Evidence from 78 Developing Countries," Arthaniti: Journal of Economic Theory and Practice, , vol. 18(1), pages 32-55, June.
    2. Simplice A. Asongu, 2019. "The persistence of global terrorism," Working Papers of the African Governance and Development Institute. 19/053, African Governance and Development Institute..
    3. Simplice A. Asongu & Stella-Maris I. Orim & Rexon T. Nting, 2019. "Terrorism and Social Media: Global Evidence," Journal of Global Information Technology Management, Taylor & Francis Journals, vol. 22(3), pages 208-228, July.
    4. Samba Diop & Simplice A. Asongu & Vanessa S. Tchamyou, 2021. "Mitigating the Macroeconomic Impact of Severe Natural Disasters in Africa: Policy Synergies," Working Papers 21/094, European Xtramile Centre of African Studies (EXCAS).
    5. Pierre E. Biscaye & Travis W. Reynolds & C. Leigh Anderson, 2017. "Relative Effectiveness of Bilateral and Multilateral Aid on Development Outcomes," Review of Development Economics, Wiley Blackwell, vol. 21(4), pages 1425-1447, November.

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    More about this item

    Keywords

    Foreign aid; Terrorism; Quantile regression;
    All these keywords.

    JEL classification:

    • C52 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Evaluation, Validation, and Selection
    • D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances; Revolutions
    • F42 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - International Policy Coordination and Transmission
    • K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law
    • O38 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Government Policy

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