Does Foreign Development Aid Trigger Ethnic War in Developing States?

• Author: Demet Yalcin Mousseau
• Published date: 01 October 2021
• Date: 01 October 2021
• DOI: http://doi.org/10.1177/0095327X20902180
• Subject Matter: Articles

2021, Vol. 47(4) 750 –769

Does Foreign

Development Aid

Trigger Ethnic War in

Developing States?

Demet Yalcin Mousseau

1

Abstract

Can foreign aid trigger ethnic war? The quantitative conflict literature has produced

mixed findings on the effect of foreign aid on civil war in developing states. One

reason for the mixed results is that a subset of civil wars, ethnic wars, are more likely

than other kinds of civil wars to be triggered by foreign aid. This is because large

amounts of foreign aid can cause the state to become a prize worth fighting over,

mobilizing ethnic identity and group-related rebellion. This article investigates this

question by testing the separate impacts of total, bilateral, and multilateral aid given

by state and nonstate actors on the onset of ethnic war, using a cross-national time-

series dataset of 147 countries from 1961 to 2008. The findings show a very strong

association of foreign aid with ethnic war, whether measured as total aid, bilateral

aid, or multilateral aid.

Keywords

conflict resolution, international relations, minority issues, origins/forms of conflict,

political science

1

School of Politics, Security, and International Affairs, University of Central Florida, Orlando, FL, USA

Corresponding Author:

Demet Yalcin Mousseau, School of Politics, Securit y, and International Affairs, University of Central

Florida, Orlando, FL, USA.

Email: demet.mousseau@ucf.edu

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DOI: 10.1177/0095327X20902180

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Article

Mousseau 751

Many developing states receive foreign development aid from donor states, organi-

zations, or agents with the objective of improving their social and economic prob-

lems. Foreign aid is generally given from bilateral and multilateral sources and the

conditions of aid differ according to the arrangements between donors and aid

recipient states. Does foreign development aid help developing countries or lead

to instability and war? A fair number of quantitative studies have looked at the

impact of foreign aid on civil war in developing states, using different indicators

of these variables. The findings in this literature are mixed and no study has tested

the effect of different types of aid on ethnic wars quantitatively, specifically identi-

fying whether a conflict is, at its core, an ethnically motivated war.

The objective of this article is to investigate the effects of foreign development

aid from bilateral and multilateral sources on the onset of ethnic wars in aid recipient

countries. Ethnic identity-based low-scale wars are common in developing coun-

tries. Foreign aid often makes up a significant portion of a developing state’s rev-

enue and the allocation of foreign aid can influence the distribution of rents among

different groups, increasing competition and conflict among them (Dimico, 2013;

Esman, 1997; Ruggeri & Schudel, 2010).

While the impact of foreign aid on civil conflict in states has been extensively

explored by many scholars, the majority of these studies are qualitative and many

focus on humanitarian aid. Those that have analyzed the relationship between civil

war and foreign development aid quantitatively haveconcentrated usually on regional

level investigations, particularly in sub-Saharan Africa and parts of Asia (De Ree &

Nillesen,2009; Strange et al., 2017; Wood& Molfino, 2016; Wood & Sullivan,2015).

The few studies that haveexamined the impact of foreign aid on the onsetof civil war

quantitativelyhave attained mixed results(see, e.g., Collier & Hoeffler, 2002; Gutting

& Steinwand, 2017; Nielsen et al., 2011; Savun & Tirone, 2011, 2012). There are no

large-N quantitative studies that have tested the effects of total, bilateral, and multi-

lateral foreign aid (excluding military aid) on the onset of ethnic war.

This study aims to improve our overall understanding of how the external eco-

nomic force of development aid may impact ethnic war conditions in developing

states. Relying on the Ethnic Power Relations (EPR) dataset, ethnic war is defined as

low-scale and ethnically motivated war with an annual battlefield-connected death

threshold of 25 people. External aid variables are separated as total, bilateral, and

multilateral, to assess whether aid given from different sources has unique effects on

the onset of ethnic war.

Total aid is aggregate level aid given by bilateral, multilateral, and

non-Organization for Economic Cooperation and Development (OECD) states to

developing states. Bilateral aid refers to state-to-state aid, usually flowing from a

developed donor state to a developing state. Since France, Germany, and the United

States appear as the largest d onor states in the years exam ined here, this study

expects that their aid can influence the rent-seeking politics among ethnic groups

in developing states. Hence, I opted to examine the individual effects of each of

these states’ bilateral aid to their recipient states. Multilateral aid is the aid given by

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