Bandyopadhyay, Subhayu; Sandler, Todd; Younas, Javed - Federal Reserve Bank of St. Louis - 2009
We present a model where foreign aid bolsters proactive counterterrorism efforts of a foreign nation that is a source 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...