Paying Them to Hate US: The Effect of U.S. Military Aid on Anti-American Terrorism, 1968-2014

Eugen Dimant (), Tim Krieger and Daniel Meierrieks

No 8411, CESifo Working Paper Series from CESifo

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.

Keywords: U.S. military aid; anti-American terrorism; transnational terrorism; instrumental variable estimation (search for similar items in EconPapers)
JEL-codes: D74 F35 (search for similar items in EconPapers)
Date: 2020
New Economics Papers: this item is included in nep-his and nep-pol
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Related works:
Journal Article: Paying Them to Hate US: The Effect of US Military Aid on Anti-American Terrorism, 1968–2018 (2024)
Working Paper: Paying Them to Hate US: The Effect of U.S. Military Aid on Anti-American Terrorism, 1968-2014 (2020)
Working Paper: Paying Them to Hate US: The Effect of U.S. Military Aid on Anti-American Terrorism, 1968-2014 (2020)
Working Paper: Paying them to hate US: The effect of U.S. military aid on anti-American terrorism, 1968-2014 (2020)
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