By Haley Parker

« Does foreign aid reduce terrorism? Socio-economic aid aims to address the root causes of terrorism by improvinghealth care, education, justice systems, infrastructure, etc. in the recipient country, whilemilitary aidfunds military operations in a recipient country. My argumentis that military and economic types of aid have varying effectsover time.Socio-economic aid will likely reduce terrorism in the long-term as it alleviates grievances that boost extremists’ recruitment, however, it may increase terrorist activity in the short run, asit provides easy targets. Military aid suppresses militant organizations in the short-term through “decapitation”and cutting off logisticalsupport, howevercasualties among civilians that accompany such military operations may backfire in the long run.

To test my argument, I analyze time-series cross-sectional data on U.S economic and military aid and terrorist activity during 1946–2010 across 142countries. My key findings include: 1) in the models with country-level fixed effects, aid has no systematiceffect on terrorism, 2) when considering the impact of economic aid on terrorism, when no military aid is provided, economic aid in the previous year is associated with a modest increase in terrorism, while economic aid provided in the previous 7 to 10 years is associated with a modest reduction in terrorism. »

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