In this study, we resolve part of the confusion over how foreign aid affects armed conflict. Our results suggest that aid can affect the likelihood of violent armed conflict by influencing a state's ability to credibly commit to an agreement that averts war at present and into the future. Using AidData's comprehensive dataset of bilateral and multilateral aid from 1981 to 2005, we evaluate the effects of foreign aid on violent armed conflict. In addition to rare-event logit analysis, we employ matching methods to account for the possibility that aid donors anticipate conflict. The results show that negative aid shocks significantly increase the probability of armed conflict onset.
http://www.aiddata.org/weceem_uploads/_ROOT/File/Briefs/Brief1-ConflictAndAidShocks.pdf--
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