US military
US military
Does US military aid strengthen weak states and deter adversaries, or foster resentment and increase terrorist attacks?
Traditional US foreign policy viewed military aid as a tool to strengthen weak states and deter adversaries (e.g. Obama 2013). Consequently, the US has provided billions of dollars in military aid (mostly directed toward military financing and training) to many countries in the world in the last decades, as shown in Figure 1.
Figure 1: US military aid 1968-2018
US military aid 1968-2018
US military aid 1968-2018
This was expected to enhance US security with respect to anti-American terrorism. The reason being that greater military capacity increases the costs of carrying out terrorist attacks, thereby deterring potential incidents. Indeed, since the late 1960s the US has been targeted by terrorism (most notoriously, the 9/11 terrorist attacks), as illustrated in Figure 2, motivating US interest in curbing anti-American terrorism.
Figure 2: Anti-American terrorism 1968-2018
Anti-American terrorism 1968-2018
Anti-American terrorism 1968-2018
However, growing evidence points to a paradoxical effect: under certain conditions, military aid—or even the spread of American values—can intensify anti-American resentment and actually foster terrorist attacks (Neumayer and Plümper 2011, Krieger and Meierrieks 2015). Earlier evaluations of other types of US interventionism support the view that it may be counterproductive. For example, Nunn and Qian (2014) show that US food aid can prolong civil wars in recipient countries, while Mahmood and Jetter (2023) find that US drone strikes in Pakistan increase both terrorist attacks and anti-American protests.
Military aid leads to more anti-American terrorism
Further investigating unintended consequences of aid, we examine the interactions between US military aid and anti-American terrorism (Dimant et al. 2024). Drawing on a comprehensive dataset covering 174 countries from 1968 to 2018, we first study the correlation between aid and anti-American terrorism by means of simple OLS regressions. As shown in Figure 3, there is a positive relationship between US military aid payments and anti-American terrorism, suggesting a backfiring effect.
Figure 3: The relationship between US military aid and anti-American terrorism
The relationship between US military aid and anti-American terrorism
The relationship between US military aid and anti-American terrorism
Still, an analysis of the aid-terrorism relationship does not imply causality. For instance, anti-American terrorist attacks may influence the level of US military support, leading to reverse causality. To tackle this issue, we use an instrumental variables (IV) approach. Our instrument is based on the regional share of US military aid, i.e. the aid allocated to countries within the same geographic region as the recipient country. This instrument rests on the assumption that regional US strategic interests, which shape how military aid is distributed, vary largely independently of any single country’s internal circumstances. This approach builds on established methods in the evidence base (Acemoglu et al. 2019, Nunn and Qian 2014).
Our IV results are similarly striking: an increase in US military aid consistently leads to a rise in anti-American terrorist attacks. Quantitatively, our IV estimates indicate that doubling this type of military aid is associated with a 7.9 percentage point increase in the likelihood of an anti-American terrorist attack.
How can military aid fuel terrorism?
At first glance, it may seem counterintuitive that more military aid could foster terrorism. Yet our research points to several mechanisms that help explain this. On one hand, more funding may, in fact, weaken local capacities if funds are misallocated or managed inefficiently. On the other hand, large infusions of money often distort political processes, fostering corruption and clientelism while deepening social divides. When military aid primarily buttresses existing power structures, opposition groups and marginalised communities can feel excluded. This perception of an unjust status quo heightens anti-American sentiment and spurs terrorist activities.
Indeed, we provide evidence for several of these proposed mechanisms, showing that higher levels of military aid correlate with reduced military capacity as well as greater economic-political exclusion and corruption in recipient countries. We also provide tentative evidence that more US military aid adversely affects public opinion towards the US in recipient countries.
Policy implications for US foreign policy
The implications of our study are profound for US foreign policy: if military aid indeed amplifies anti-American terrorism, policymakers must urgently revisit the distribution and oversight practices associated with the provision of aid. One helpful approach is to reform aid modalities by establishing stronger monitoring mechanisms and combating corruption. A broader security strategy that integrates economic development, institutional strengthening and social inclusion can more effectively address the root causes of terrorism. However, the Trump administration’s policy of cutting many USAID programmes threatens this multidimensional approach, as those initiatives have traditionally been funded from the development, rather than the military, budget. In addition, regional coordination should be intensified to mitigate the unintended consequences of unilateral aid. This is especially crucial in conflict regions, where counterterrorism efforts can inadvertently spark further violence.
The future of US military aid in shaping foreign policy priorities
Our study shows that US military aid can raise the likelihood of anti-American terrorist attacks in recipient countries, challenging the assumption that such aid automatically brings stability. Instead, there is a real risk of undermining local capacity, enabling corruption, and intensifying social and political problems. Policymakers should therefore adopt a more integrated strategy that combines military, economic and institutional components to foster long-term security and social equity. Whether the current US administration under President Trump will embrace such an approach remains unclear. Current foreign policy is more likely to increase military aid for a narrow set of countries and curb it for others, while at the same time dramatically reducing traditional development assistance—an approach unlikely to strengthen genuine counterterrorism measures that protect American citizens and interests.
It is important to note that our findings point to the need for further research. For instance, future work could explore whether institutional reforms or non-governmental actors can help mitigate these negative effects. Ultimately, policy measures must extend beyond short-term security goals and aim to establish stable, equitable structures.
References
Acemoglu, D, Naidu, S, Restrepo, P, and Robinson, J, (2019), "Democracy does cause growth," Journal of Political Economy, 127(1), 47–100.
Dimant, E, Krieger, T, and Meierrieks, D, (2024), "Paying them to hate US: The effect of US military aid on anti-American terrorism, 1968–2018," Economic Journal, 134(663), 2772–2802.
Krieger, T, and Meierrieks, D, (2015), "The rise of capitalism and the roots of anti-American terrorism," Journal of Peace Research, 52(1), 46–61.
Mahmood, R, and Jetter, M, (2023), "Gone with the wind: The consequences of US drone strikes in Pakistan," Economic Journal, 133(650), 787–811.
Neumayer, E, and Plümper, T, (2011), "Foreign terror on Americans," Journal of Peace Research, 48(1), 3–17.
Nunn, N, and Qian, N, (2014), "US food aid and civil conflict," American Economic Review, 104(6), 1630–1666.
Obama, B, (2013), "Remarks by the president at the National Defense University," The White House.