Interesting ideas and charts in this paper by Jean-Paul Azam and Véronique Thelen, which looks at the link between aid and presence of U.S. troops in foreign countries and terrorist attacks.
From the abstract
. . . military intervention, as captured by the presence of US soldiers on the ground is counter-productive, as it increases the number of terrorist attacks both by source country and by host country.
. . . rich countries, with the exception of Germany, as well as Bangladesh, Chile, India, Indonesia and Nigeria, produce much less attacks than they host. In contrast, Iran is exporting quite a lot of attacks while hosting fewer of them. P. 10.From the conclusions
These findings strongly support the view that foreign aid and educational capital are the main inhibitors of transnational terrorist attacks by source country, while military interventions are robustly counter-productive. P. 24If aid is important, questions remain about the best way to allocate it.
I do not find very clear the way the authors dealt with endogeneity.
HT: Jacob A. Jordaan