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Does aid cause conflict in Pakistan?

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  • Nadia Tahir

Abstract

This study provides evidence from Pakistan on how the delegated task of achieving strategic objectives of the donor can lead to incompatibility of aid objectives which then generates perpetual and multidimensional domestic conflict in the recipient society. We use count data method to estimate the relationship between aid and conflict. At the aggregate level, social sector spending, regime change and youth bulge are positively and significantly related with conflict. However, aid per capita gives ambiguous results. It is significant with conflict count in the terrorism data-set and insignificant for data on armed conflict. Inclusion of youth bulge and unemployment rate confirms the marginalization hypothesis of conflict. Inflation rate and the tax variables are insignificant. This confirms that aid erodes fiscal capacity. At project-level data, conflict is strongly related with aid commitment and purpose. Discrepancy in aid allocation and commitment may accentuate conflict.

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  • Nadia Tahir, 2017. "Does aid cause conflict in Pakistan?," Defence and Peace Economics, Taylor & Francis Journals, vol. 28(1), pages 112-135, January.
    • Handle: RePEc:taf:defpea:v:28:y:2017:i:1:p:112-135
    DOI: 10.1080/10242694.2014.1000007
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    1. Paul Collier, 0. "Post-conflict Recovery: How Should Strategies Be Distinctive?," Journal of African Economies, Centre for the Study of African Economies, vol. 18(suppl_1), pages -131.
    2. William Easterly (ed.), 2008. "Reinventing Foreign Aid," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262550660, April.
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    1. Koppenberg, Maximilian & Mishra, Ashok K. & Hirsch, Stefan, 2023. "Food aid and violent conflict: A review and Empiricist’s companion," Food Policy, Elsevier, vol. 121(C).
    2. Parlow, Anton, 2018. "Women's Empowerment, Gendered Institutions and Economic Opportunity: An Investigative Study for Pakistan," MPRA Paper 86331, University Library of Munich, Germany.
    3. Parlow, Anton, 2018. "Women's Empowerment, Gendered Institutions and Economic Opportunity: An Investigative Study for Pakistan," MPRA Paper 86367, University Library of Munich, Germany.
    4. Stijn van Weezel, 2017. "The Effect of Civil War Violence on Aid Allocations in Uganda," Working Papers 201725, School of Economics, University College Dublin.
    5. Zürcher, Christoph, 2017. "What Do We (Not) Know About Development Aid and Violence? A Systematic Review," World Development, Elsevier, vol. 98(C), pages 506-522.
    6. Parlow, Anton, 2018. "Women's Empowerment, Gendered Institutions and Economic Opportunity: An Investigative Study for Pakistan," MPRA Paper 93916, University Library of Munich, Germany.
    7. Koppenberg, Maximilian & Mishra, Ashok K. & Hirsch, Stefan, 2023. "Food Aid and Violent Conflict: A Review of Literature," IZA Discussion Papers 16574, Institute of Labor Economics (IZA).
    8. Stijn van Weezel, 2017. "Mostly Harmless? A Subnational Analysis of the Aid-Conflict Nexus," Working Papers 201728, School of Economics, University College Dublin.

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