Devex Pro Insider: Does aid cause terrorism, or does terrorism cause aid?

A possible link between international terrorism and aid is explored in new research published this week by the Federal Reserve Bank of St. Louis, in the United States. It’s not clear what got them curious about this question — they refrained from mentioning — but they’ve run the numbers, and there’s a clear correlation. The more incidents of transnational terrorism originating in your country, the more aid you get. The authors refrained from much explanation of why this might be the case, although they did include another graph which shows that the reverse correlation is true for foreign direct investment. A natural conclusion that you might draw from the preceding paragraphs is that going out and bombing people is a good way to attract foreign aid. But let’s unpack this conclusion a bit. First, bear in mind that just because two things are correlated, it doesn’t mean there’s a causative relationship. For example, the popularity of the first name Camden correlates extremely closely with the number of UFO sightings in Florida. Kerosene use in El Salvador correlates with Google searches for “attacked by a squirrel.” And even if correlation does imply causation, we need to be careful about which direction the causative link actually runs. In this case, it seems likely that all of these findings depend on other factors — political stability and national income. Fragile states that attract less investment and require more aid are exactly the kind of place international terrorists are likely to find a home. In other words, aid doesn’t lead to terrorism, or the reverse. Poverty and instability lead to both. This suggests that failure to address the problems of other countries will eventually lead to problems in one’s own. It’s this argument that aid advocates have been pressing on governments across the global north — so far, this year, with limited success. Also in this today’s edition: The U.S. budget war heads to the courts, and a wise decision to scrap the ugliest name in global accountancy. Bits and pieces At an INPAS. Next month, a new international nonprofit accounting standard will launch in Switzerland. It might not currently be on your radar, but it’s a quietly consequential effort to bring the sector together in a more consistent way, and the culmination of the best part of a quarter of a century of work. The basic principle behind it is that in order to work out who deserves funding, you need to look at the financial records of the institutions you want to back. But right now, INGOs and NGOs all over the world are reporting their results using different rules — rules usually designed for for-profit entities, which don’t give or receive a lot of grants or donations. It’s a fascinating example of the quiet behind-the-scenes structural changes that do so much to ensure that aid is delivered efficiently. It’s also worth noting that they’ve ditched their working name for the rules — INPAG. It’s not clear whether that’s only because they decided to make it a standard instead of guidance. Or just because they were worried that INPAG sounded like a Klingon swear word, or one of the orcs from “The Lord of the Rings.” Budget blast. In case you missed it yesterday, my colleague Michael Igoe published an excellent summary of the U.S. budget process and why it’s gotten so complicated. For those outside the U.S., it’s crucial to realize that, unlike in the majority of countries, where the executive branch sets the budget and the legislature approves it, in the United States, it’s the other way around. The U.S. has three separate budget proposals — one from the president, one from the House of Representatives, and one from the Senate. But the legislature, broadly, holds the final power. Or that’s the theory, anyway. The White House is testing this by refusing to spend the billions that have been allocated by Congress to foreign aid. It seems no one really knows what happens when an administration does this, and it’s already gone to the courts — where one judge has ruled the attempt illegal, although this will doubtless be relitigated many times. Two things to take away: First, the U.S. foreign assistance budget is likely to be a lot larger than you’d think from the rhetoric so far. But second, it’s not clear when, if ever, anyone is going to spend that money. Rescission decision. Further to the above, one story we’ll be keeping a close eye on is the “pocket rescission” proposal from the Trump administration, which would cancel $4.9 billion of foreign assistance funding. Last week, a judge ruled that the move was illegal and ordered the administration to spend the funds as congressionally ordered. But don’t expect that to be the last word. The administration has already appealed, and the appeals court could block the ruling. Ultimately, my U.S. colleagues tell me, this is likely headed to the Supreme Court. Firing and hiring. One new bit of information that is doubtless likely to anger those who lost their jobs in the recent U.S. jobs cull: The State Department is already hiring again — at least, according to one of the specialist publications covering the U.S. civil service. The article quotes one angry laid-off staffer describing it as “the definition of wasteful government spending.” Cool story, Pro. In last week’s newsletter, we detailed all the resources we pulled together during Devex Pro Week, which focused on the key funding institutions in our sector. The week also included several live events looking at the key issues the sector faces. You can now watch recordings of all of them, and find out more about: • How philanthropy can fund international development more effectively • Whether ODA has a future in Africa • The future role of the INGO in a world of reduced aid funding Test your knowledge. Want to show off your development knowledge? Look no further than our monthly news quiz. Moving on Sidi Ould Tah, a Mauritanian economist and former president of the Arab Bank for Economic Development in Africa, has taken up his post as the new president of the African Development Bank. He replaces Akinwumi Adesina, who led the bank for 10 years, during which time he tripled its capital under management. Diene Keita has been appointed executive director of the United Nations Population Fund. Keita, a Guinea national, is the fund’s sixth executive director and has been serving as acting executive director since July 16 this year, UNFPA said. She has also served as U.N. resident coordinator in Mauritania, Benin, and the Democratic Republic of Congo. Reintje van Haeringen has been appointed as the new executive director of CARE International. Van Haeringen, who spent the last seven years leading the work of CARE Nederland as CEO, said: “I am honoured to have been entrusted with this role as the sector and the communities we work with face extraordinary challenges. We will continue to fight for the rights of women and girls, as we strive to deliver on our commitments to forge more equitable partnerships and urge governments to keep their promises to support people affected by crises.” Médecins Sans Frontières has elected Dr. Mohamed Javid Abdelmoneim as its new international president — a role that involves coordinating the work of the organization’s board and general assembly. Dr. Javid's career with MSF began in 2009, where he served as an emergency doctor in Iraq. He is a Sudanese-Iranian emergency medicine doctor who was born and trained in the United Kingdom. He replaces Christos Christou, who left an emotional message outlining the work of the last six years. Cécile Fruman has been appointed World Bank country director for Brazil, where she will manage a portfolio of 49 projects totalling $7.8 billion. She succeeds Johannes Zutt, who held the position for the last three years. Fruman is a French national with over 25 years of experience in international development. She joined the World Bank in 1998 through the Young Professionals Program and has since held senior regional and global roles. Chatham House has announced that Valerie Amos and Theresa May have been appointed as the new presidents of the think tank. Amos is a former U.N. under-secretary-general for humanitarian affairs and emergency relief coordinator, while May is a former U.K. prime minister. Up next Party time. It’s party conference season in the U.K. This annual circus is an opportunity for development experts to quiz members of the U.K. Parliament on what their plans are for aid policy. It’s already kicked off this week with the conference of the insurgent Reform Party, whose hard-right agenda has pushed them to a strong position in the polls. Here’s a guide. UNGA underway. The U.N. General Assembly officially opens on Sept. 9 in New York City. Although the biggest events are still to come during the high-level week, there are a lot of development discussions happening already. Again, here’s a guide. Africa climate. The second Africa Climate Summit, known as ACS2, kicks off tomorrow in Addis Ababa, Ethiopia. My colleague Ayenat Mersie will be there — say hello, or send tips to ayenat.mersie@devex.com. Job of the week Your Devex Pro membership includes access to the world’s largest global development job board. Here’s the latest opportunity: • Senior Counsel - Public Sector Operations, Asian Infrastructure Investment Bank Search for more opportunities now.