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

47 Pages Posted: 22 Jul 2020 Last revised: 8 Oct 2021

See all articles by Eugen Dimant

Eugen Dimant

University of Pennsylvania; CESifo

Tim Krieger

University of Freiburg - Department of Economics

Daniel Meierrieks

WZB Berlin Social Science Center

Multiple version iconThere are 2 versions of this paper

Date Written: October 7, 2021

Abstract

Does U.S. military aid make the United States safer? Or does it have unintended and adverse consequences for U.S. security? We provide causal estimates of the effect of U.S. military aid on anti-American terrorism for a sample of 174 countries between 1968--2018 by exploiting plausibly exogenous time variation in global levels of U.S. military aid associated with distinct aid programs and cross-national time-series variation in the relative importance of the various military aid programs for recipient countries. We find that higher levels of military aid lead 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 2.7 percentage points. Examining potential transmission channels, we find that more U.S. military aid leads to more corruption and exclusionary policies in recipient countries. We argue that U.S. military aid results in anti-American terrorism by undermining institutions in recipient countries and creating anti-American resentment among those parts of the population that do not have direct or indirect access to benefits arising from aid.

Keywords: U.S. Military Aid; Anti-American Terrorism; Transnational Terrorism; Instrumental Variable Estimation

JEL Classification: D74, F35

Suggested Citation

Dimant, Eugen and Krieger, Tim and Meierrieks, Daniel, Paying Them to Hate US: The Effect of U.S. Military Aid on Anti-American Terrorism, 1968-2014 (October 7, 2021). Available at SSRN: https://ssrn.com/abstract=3639277 or http://dx.doi.org/10.2139/ssrn.3639277

Eugen Dimant (Contact Author)

University of Pennsylvania ( email )

Philadelphia, PA 19104
United States

HOME PAGE: http://sites.google.com/view/eugendimant/

CESifo ( email )

Poschinger Str. 5
Munich
Germany

Tim Krieger

University of Freiburg - Department of Economics ( email )

University of Freiburg
Wilhelmstr. 1b
Freiburg, D-79085
Germany

HOME PAGE: http://www.wguth.uni-freiburg.de

Daniel Meierrieks

WZB Berlin Social Science Center ( email )

Reichpietschufer
50
Berlin, D-10785
Germany

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