A Friendly Fire? The Impact of Foreign Aid on the Risk of Civil Conflict: Evidence from 144 Countries, 1973-2015

Abstract

This thesis analyzes theoretically and empirically the effects of foreign aid on the onset of civil conflict. The determinants of civil conflict can broadly be reduced to greed and grievances. The literature dominant in the field has not found a significant relationship between grievances and civil conflict onset. The objective of this thesis is to gain a better understanding of how greed and grievances interact and how foreign aid impacts greed and grievances in a society. This thesis separates foreign aid into different sectors in order to establish its effect independently. OLS and logistic regression analysis are used to determine the effects of aid on conflict. The findings show that military aid by the US has a significant and positive relationship with civil conflict onset. The other types of aid, social, economic, production and humanitarian, do not have a significant relationship with conflict onset according to this analysis. The results show that proxies for greed and grievances are insignificant, which might be a result of the data used. The finding that US military aid is significant and positively related is of importance since it accomplishes the opposite of what it is intended to.