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An Issue of National Security: The Roles of United States Economic and Military Aid in Promoting Human Development and Political Stability in Developing Countries

This thesis examines the effects of United States economic and United States military aid on the factors of human development, political stability, and rule of law on three regions of the world, the Middle East, South America, and Sub-Saharan Africa, through a series of ordinary least squares regressions utilizing lagged independent variables in order to indicate causality, and views the issue through the lens of US national security. The results are compared and contrasted with previous studies, which came to varying conclusions regarding the effectiveness of aid. This thesis finds that US economic aid has both positive and negative, both significant and insignificant, effects upon human development and political stability, and these effects vary dynamically between the three regions, while not having any significant effects upon the rule of law. Of notable importance, this thesis finds that economic aid to developing countries generally has significant beneficial effects on HDI. Past theoretical research has indicated that increases in HDI should result in less political instability and less extremism. Furthermore, this paper finds that U.S. economic aid to developing countries generally has significantly more beneficial effects on the HDI and/or political stability of those recipient countries than does U.S. military aid. The paper also finds that U.S. and non-US economic in military aid has positive HDI and/or poltical stability effects in some geopolitical regions and negative effects in others, which indicates that it could be beneficial for a future study to conduct economic and military aid case studies for these regions, exploring and comparing potential reasons behind the differing outcomes. The thesis concludes by acknowledging both the positive and negative effects of US economic and military aid, and recommends a reevaluation of current US aid policy to right certain inefficiencies and ineffectiveness.