The Global War on Terror and U'S' Development Assistance: Usaid Allocation By Country, 1998-2005

19 Pages Posted: 8 May 2007

See all articles by Todd J. Moss

Todd J. Moss

Center for Global Development

Scott Standley

Center for Global Development

David Roodman

Center for Global Development

Date Written: July 2005

Abstract

The launch of the Global War on Terror (GWOT) soon after September 11, 2001 has been predicted to fundamentally alter U.S. foreign aid programs. In particular, there is a common expectation that development assistance will be used to support strategic allies in the GWOT, perhaps at the expense of anti-poverty programs. In this paper we assess changes in country allocation by USAID over 1998-2001 versus 2002-05. In addition to standard aid allocation variables, we add several proxies for the GWOT, including the presence of foreign terrorist groups, sharing a border with a state sponsor of terrorism, troop contribution in Iraq, and relative share of Muslim population. We find that any major changes in aid allocation related to the GWOT appear to be affecting only a handful of critical countries, namely, Iraq, Afghanistan, Jordan, and the Palestinian Territories. The extra resources to these countries also seem to be coming from overall increases in the bilateral aid envelope, combined with declines in aid to Israel, Egypt, and Bosnia and Herzegovina. We do not find that any of our GWOT proxies (or their interactions) are significantly correlated with changes in country allocation of aid flows to the rest of the world, including to sub-Saharan African countries. Concerns that there is a large and systematic diversion of U.S. foreign aid from fighting poverty to fighting the GWOT do not so far appear to have been realized.

Keywords: Global War on Terror (GWOT), September 11, foreign aid, terrorism, Iraq, muslim, poverty

JEL Classification: F35, N45, F51, F52

Suggested Citation

Moss, Todd J. and Standley, Scott and Roodman, David, The Global War on Terror and U'S' Development Assistance: Usaid Allocation By Country, 1998-2005 (July 2005). Available at SSRN: https://ssrn.com/abstract=984258 or http://dx.doi.org/10.2139/ssrn.984258

Todd J. Moss (Contact Author)

Center for Global Development ( email )

2055 L St. NW
5th floor
Washington, DC 20036
United States

HOME PAGE: http://www.cgdev.org

Scott Standley

Center for Global Development ( email )

2055 L St. NW
5th floor
Washington, DC 20036
United States

David Roodman

Center for Global Development ( email )

2055 L St. NW
5th floor
Washington, DC 20036
United States

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