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Paying them to hate US: The effect of U.S. military aid on anti-American terrorism, 1968-2014

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  • Dimant, Eugen
  • Krieger, Tim
  • Meierrieks, Daniel

Abstract

Does U.S. military aid make the United States safer? To answer this question, we collect data on 173 countries between 1968 and 2014. Exploiting quasi-random variation in the global patterns of U.S. military aid, our paper is the first to provide causal estimates of the effect of U.S. military aid on anti-American terrorism. We find that higher levels of military aid led to an increased likelihood of the recipient country to produce anti-American terrorism. For our preferred instrumental-variable specification, doubling U.S. military aid increases the risk of anti-American terrorism by 4.4 percentage points. Examining potential transmission channels, we find that more U.S. military aid leads to more corruption and exclusionary policies in recipient countries. Consistent with a theoretical argument developed in this paper, these results indicate that the inflow of military aid induces rent-seeking behavior, which in turn encourages terrorism by groups that suffer from reduced economic and political participation as a consequence of rent-seeking. These groups direct their dissatisfaction against the United States as the perceived linchpin of an unfavorable status quo in the recipient country.

Suggested Citation

  • Dimant, Eugen & Krieger, Tim & Meierrieks, Daniel, 2020. "Paying them to hate US: The effect of U.S. military aid on anti-American terrorism, 1968-2014," Discussion Paper Series 2020-05, University of Freiburg, Wilfried Guth Endowed Chair for Constitutional Political Economy and Competition Policy.
    • Handle: RePEc:zbw:wgspdp:202005
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    References listed on IDEAS

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    More about this item

    Keywords

    U.S. military aid; anti-American terrorism; transnational terrorism; instrumental variable estimation;
    All these keywords.

    JEL classification:

    • D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances; Revolutions
    • F35 - International Economics - - International Finance - - - Foreign Aid

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