Faith and Foreign Aid.

In this paper we study the effects of religion - specifically Islam - on the targeting of foreign aid. The vast majority of foreign aid originates in the West, where apprehension toward the Muslim world increases simultaneously with greater interactions and interdependence. This phenomenon is particularly acute in Europe, with its Muslim population of over 14 million. Additionally, fears of terrorism continue to rise; for Europeans, Islamic fundamentalists live not in distant countries but next door. Finally, with Turkey as the largest European-Union candidate country, aid should disproportionately flow there. We argue that these factors should have led to greater foreign-aid targeting of Islamic countries, controlling for other variables traditionally considered to be driving foreign aid donations. To estimate the religious selectivity of foreign aid, we employ a Prais-Winsten model on data from the new Project Level Aid database, which includes more than 500,000 development projects from 1970 to 2000. Among other conventional controls, we control for oil exports and use multiple measures of "Islamic-ness.". These findings will be important to learning how non-traditional recipient characteristics drive the allocation of foreign aid. ..PAT.-Unpublished Manuscript [ABSTRACT FROM AUTHOR]