Public Choice

, 149:365

Can peace be purchased? A sectoral-level analysis of aid’s influence on transnational terrorism


DOI: 10.1007/s11127-011-9875-y

Cite this article as:
Young, J.K. & Findley, M.G. Public Choice (2011) 149: 365. doi:10.1007/s11127-011-9875-y


Does foreign aid reduce terrorism? We examine whether foreign aid decreases terrorism by analyzing whether aid targeted toward certain sectors is more effective than others. We use the most comprehensive databases on foreign aid and transnational terrorism—AidData and ITERATE—to provide a series of statistical tests. Our results show that foreign aid decreases terrorism especially when targeted toward sectors, such as education, health, civil society, and conflict prevention. These sector-level results indicate that foreign aid can be an effective instrument in fighting terrorism if allocated in appropriate ways.


Foreign aidSectoral aid and terrorismTransnational terrorismPanel analysis

JEL Classification


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© Springer Science+Business Media, LLC 2011

Authors and Affiliations

  1. 1.School of Public AffairsAmerican UniversityWashingtonUSA
  2. 2.Department of Political ScienceBrigham Young UniversityProvoUSA