The conflict following the Arab Spring is not the first wave of civil war in the Muslim world in recent time. From the mid-1980s to the end of the century, an average of one in 10 predominantly-Muslim countries experienced violent civil war in any given year. We provide a partial explanation for this statistic: a foreign aid windfall to poor, non-oil producing Muslim countries during the twin oil crises of the 1970s allowed the recipient states to become more repressive and stave off rebellion. When oil prices fell in the mid-1980s, the windfall ended, and the recipient countries experienced a significant uptick in civil war. To provide a causal interpretation we leverage a quasi-natural experiment of oil price induced aid disbursements which favored Muslim countries over non-Muslim countries. Our empirical findings are consistent with existing theories that foreign aid can “buy” stability.
Aid and the Rise and Fall of Conflict in the Muslim World
* The authors are grateful to Shawn Cole and Lou Wells as well as participants at the Harvard development faculty brownbag seminar and the Research Frontiers in Foreign Aid Conference at Princeton University for comments and suggestions, and we thank Kaitlyn Tuthill for excellent research assistance. We are also grateful to the editors and two anonymous referees whose comments have significantly improved the paper. An earlier version of this paper — Can Foreign Aid Buy Stability? — benefited greatly from comments and suggestions from Alberto Alesina, Charles Cohen, Martin Feldstein, and Roger Owen, as well as seminar audiences at Harvard Business School, the International Political Economy Society, and the NBER. Ahmed thanks Nuffield College and the Niehaus Foundation at Princeton University for financial support and Werker thanks the Division of Research and Faculty Development at Harvard Business School. The usual disclaimer applies.
Ahmed FZ, Werker ED (2015), "Aid and the Rise and Fall of Conflict in the Muslim World". Quarterly Journal of Political Science, Vol. 10 No. 2 pp. 155–186, doi: https://doi.org/10.1561/100.00014060
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