Aid for non-aggression

The argued purpose of non-aggression pacts is not to ensure cooperation between signatories but to signal a commitment to peace to third-parties. This study tests whether foreign aid is a mechanism that makes this third-party signal credible. An analysis of aid commitments between 1991 and 2014 shows that donors strategically reward non-aggression partners with greater aid, and that third parties adjust their behavior toward non-aggression dyads, but only conditional on the amount of bilateral aid received, expressed in the form of greater bilateral trade and foreign direct investment.