Aiding War: Foreign Aid and the Intensity of Violent Armed Conflict

Does foreign aid reduce violence during ongoing wars? In the policy community, there has been growing optimism about the prospect for aid to improve conflict-affected and fragile areas. We investigate whether foreign aid decreases, or even increases, violence during ongoing armed conflict. We advance a theoretical argument that concentrated foreign assistance allocated during ongoing armed conflicts increases military fatalities but decreases civilian fatalities. Using geographically coded data on all sub-Saharan African countries in conflict between 1989 and 2008, within a matching frontier design and supplemented by instrumental variable analysis, we find strong substantive and statistical support for our expectations about military conflict intensity though less support for the expectations about civilian fatalities. The paper provides novel insights about the effects of concentrated aid on military versus civilian conflict intensity, characterizes the effects at a sub-national level, and expands the spatial-temporal period of the analysis. We also probe the plausibility of the causal mechanism using interview evidence drawn from ex-commanders of the Lord’s Resistance Army and generals of the Ugandan People’s Defence Forces in northern Uganda. The paper offers both academic and policy insights, including that foreign aid allocated during ongoing wars may be more problematic than it is helpful.