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The Economic Aspects of Terrorism & Implications for Foreign Aid: Case Study of Pakistan

The Economic Aspects of Terrorism & Implications for Foreign Aid: Case Study of Pakistan. Barry Morris 09 Mar 09. Outline . Poverty does not cause terrorism Economic causes of terrorism: Pakistan Frustration Poor governance Relative deprivation Implications

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The Economic Aspects of Terrorism & Implications for Foreign Aid: Case Study of Pakistan

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  1. The Economic Aspects of Terrorism & Implications for Foreign Aid: Case Study of Pakistan Barry Morris 09 Mar 09

  2. Outline • Poverty does not cause terrorism • Economic causes of terrorism: Pakistan • Frustration • Poor governance • Relative deprivation • Implications • Post 9/11 economic aid policies not optimal

  3. Poverty does not cause terrorism • Poverty increases non-violent crime • No direct correlation with violent crime • Poverty-motivated criminals have little education • Terrorist are better educated • Racial / hate crimes supported by all social classes

  4. Poverty does not cause terrorism

  5. Economic Causes of Terrorism • Frustrated expectations • Poor governance • Corruption • Unequal distribution of resources / services • Lack of political voice / economic means • Inability to modernize • Fear of negative globalization influences

  6. Pakistan Case Study • Strong economic promise • Two failed take-offs • Corruption / Inefficiency • Insufficient infrastructure • High defense spending • Economic inequalities • Declining standards of living • Disillusioned populace with no voice or means

  7. Pakistan Case Study • Inadequate public services (Education) • 1947: ~150 Madrassahs • 2003: >20,000 Madrassahs • Minimal skills for Pakistani youth • Fertile recruiting for Islamic extremists

  8. Implications for Financial Aid “If we are to win the war on terrorism, we must recognize that it is not the poverty of the third world, but our shared failure to manage third world countries’ transition out of poverty that is endangering our nation as well as theirs” Jennifer Bremer & John Kasarda THE ORIGINS OF TERROR p35

  9. Implications for financial aid • Majority of aid to Pakistan focused on military • Minimal support for economic & democratic institutions • Still a security threat • Interventionist approach / Aid requires change • Economic liberalization & democratic institutions • Private industry expertise • Education reform • Counter-terrorism with strings attached • Incentive based milestones

  10. Implications for financial aid • Desired end state • Political choice & equal opportunities • Institutions to transition out of Third World • Starves terrorists of resources, recruits and societal support

  11. Sources • Bremer, Jennifer & John D. Kasarda. "The Origins of Terror: Implications for U.S. Foreign Policy." The Milken Institute Review, 2002: 35-48. • Fair, C. Christine."Pakistan:Put Institutions First." RAND Review, 2008:19-20. • Hulbert, Matthew. "Pakistan: Anatomy of a Crises, Skeletal Opportunities." Center for Strategic Studies, no. 47 (February 2009): 1-3. • Juergensmeyer, Mark. Terror in the Mind of God. Berkeley: University of California Press, 2003. • Krueger, Alan B, & Jitka Maleckova. "Education, Poverty &Terrorism: Is There Casual Connection.”Journal of Economic Perspectives, 2003: 119-144. • Looney, Robert. "Failed Economic Take-Offs & Terrorism in Pakistan." Asian Survey (University of California Press) XLIV, no. 6 (December 2004): 771-793. • Looney, Robert. "The Role of Foreign Aide in the War on Terrorism: Examples from Pakistan." Political Crossroads (James Nicholas Publishers) 10 & 11 (2003): 5-18. • Tures, John A. "Economic Freedom and Conflict Reduction: Evidence From the 1970s, 1980s, & 1990s." Cato Journal, 2003: 533-542.

  12. Discussion

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