Integration, Repression, and Fungibility of Foreign Aid under Endogenous Corruption
Abhra Roy
Coles Research Symposium on Homeland Security Special Issue, SIFALL19-02, October 2019
Overview We analyze a model of counter-terrorism that analyzes the interaction between restriction on civic liberties (repression), foreign aid and social integration of the minority within the domestic country (the host). The terrorist engages the host in a contest in which it tries to appropriate a critical resource that is also of strategic interest to a foreign country (ally). Consequently, the ally provides aid to the host that is used to deter terrorism. We find that the ally does not provide aid unless the host reserves part of the aid to promulgate anti-terrorist rhetoric or propaganda along with pursuing preemptive measures. Further, we show that the minority is more (less) integrated when the host uses propaganda provided that the penalty associated with corruption is greater (smaller). We also find that the host is more repressive against minorities when it does not have access to propaganda. Finally, we show that the probability of an attack and corruption are lower (higher) when the host does not have access to propaganda provided that marginal cost of integration is below (above) a certain threshold. Finally, we show that aid is increasing in repression only if the host has access to propaganda.
22 | Coles Research Symposium
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