Bandyopadhyay, Subhayu; Sandler, Todd; Younas, Javed - Federal Reserve Bank of St. Louis - 2009
for transnational terrorism. Our two-stage game has the donor country choosing a first-stage contract consisting of … terrorism-fighting tied aid and general assistance. In stage 2, the donor decides its defensive measures, while the recipient … complementarity. A rise in terrorism in the donor increases home enforcement but may limit foreign enforcement at given aid levels. A …