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Economic Conditions and Terrorism

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Abstract

We explore the links between the incidence of terrorism and the state of a country's economy. Groups that are unhappy with the current economic status quo, yet unable to bring about drastic institutional changes, may find it rational to engage in terrorist activities. The result is a pattern of reduced economic activity and increased terrorism. In contrast, an alternative environment can emerge where access to economic resources is more abundant and terrorism is reduced. Our empirical results are consistent with the theory. We find that for democratic, high income countries, economic contractions lead to increased likelihood of terrorist activities.

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... Previous studies have largely focused on economic stability and drivers of terrorism. Some have generally documented the presence of an association between terrorism and economic activities (De Mesquita 2005;Bardwell and Iqbal 2021), whilst others indicate that economic downturns are associated with high numbers of terrorist attacks (Blomberg et al. 2004;Drakos and Gofas 2004;Efobi et al. 2015). On the other hand, bank financial stability literature has commonly investigated issues related to corporate governance, risk monitoring and financial performance and, recently, emerging questions related to the COVID-19 pandemic (e.g., Chan and Milne 2014;Rumler and Waschiczek 2016;Elnahass et al. 2020aElnahass et al. , b, 2021Trinh et al. 2020a). ...
... In the long term, terrorism may affect the economy's productivity by raising the costs of transactions through increased security measures, higher insurance premiums, higher financial costs, and other counter-terrorism regulations (Johnston and Nedelesc 2006). The terrorism literature documents a positive association between economic depressions and terrorism (Blomberg et al. 2004;Drakos and Gofas 2004;De Mesquita 2005;Bardwell and Iqbal 2021). Moreover, terrorism creates severe threats for life and for economic losses, which affect economic prosperity and governance (see Abadie and Gardeazabal 2003;Frey 2004;and Asongu and Nwachukwu 2017a, b). ...
... 8 Terrorism is concentrated in low-income countries with limited economic opportunities, a high rate of unemployment, and limited opportunities for people to upgrade their economic and social class (see Muller and Seligson 1987;De Mesquita 2005;Estrada et al. 2015). The empirical literature documents a positive association between economic depressions and terrorism (Blomberg et al. 2004;Drakos and Gofas 2004;De Mesquita 2005). Following the literature, we argue that a country with a developed economic system and a high level of income is likely to have a decrease in terrorist operations. ...
Article
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This study examines the impact of terrorism on bank stability, represented by bank risk and financial performance. We consider banks from 14 countries located in the Middle East and North Africa region for the period 2010–2018 using both the three-stage least-square and the generalised method of moments. The results provide strong evidence that banks located in countries with high exposure to terrorist attack exhibit low financial stability, due to high bank risk (i.e., high credit and insolvency risk). However, these banks show high financial performance (i.e., high profitability and cost efficiency), on average. Our results also show differential impacts on bank stability for countries marked as more (less) exposed to risk of attacks. For banks located in high-income-generating countries, we find that exposure to terrorism is associated with low financial performance and high credit risk, which is the opposite case for low-income-generating countries. Our results also indicate high systemic risk for listed banks operating under high terrorism risk exposure.
... The scholarship on terrorism finds the opposite to be true. While there is some empirical support for the impact of economic conditions on the nature, type, and geography of terrorism (Blomberg, Hess, and Weerapana 2004b;Benmelech, Berrebi, and Klor 2012), the prevailing academic consensus deems any relationship between economic hardship and terrorism "indirect, complicated, and probably quite weak" (Krueger and Malečková 2003, 119; see also Krueger 2007;Krueger and Laitin 2012). ...
... The empirical evidence on the impact of different types of grievances is also mixed. While some have found economic measures of individual deprivation to be insignificant predictors of terrorist violence (Thompson 1989), others reported that socioeconomic deprivation at an individual level is a significant factor in explaining terrorism (Blomberg, Hess, andWeerapana 2004a, 2004b). Furthermore, most studies overlook the possibility of multiple causal pathways connecting economic performance to terrorism. ...
... The empirical evidence on the impact of different types of grievances is also mixed. While some have found economic measures of individual deprivation to be insignificant predictors of terrorist violence (Thompson 1989), others reported that socioeconomic deprivation at an individual level is a significant factor in explaining terrorism (Blomberg, Hess, andWeerapana 2004a, 2004b). Furthermore, most studies overlook the possibility of multiple causal pathways connecting economic performance to terrorism. ...
Article
The prevailing academic consensus holds that economic hardship does not motivate terrorism. We argue that this academic consensus is misguided because it assumes a single causal pathway connecting the economy to terrorism. In addition, most tests rely on national-level macroeconomic measures of economic performance that are not well suited to capturing individual-level decision-making processes that motivate people to engage in political violence. We argue that shifts in economic performance have heterogeneous effects on terrorist activity. The suffering caused by economic hardship energizes pre-existing grievances and generates feelings of anger and resentment toward the government, making affected individuals susceptible to violent radicalization. Economic crises also increase opportunities for terrorist recruitment by weakening institutions for coping with the consequences of sharp economic downturns. On the other hand, the economic losses caused by crises reduce the resources available to terrorist groups. These competing pressures are difficult to observe at the national level and are not equally reflected in all measures of economic performance. We test these arguments using a novel dataset of terrorist attacks and terrorist crimes in the Russian federal subjects between 2008 and 2016. We find evidence to support opportunity- and resource-based arguments for terrorism. These findings suggest a need to rethink the academic consensus on terrorism and a need to problematize the theoretical and empirical approaches that brought us to the prevailing consensus.
... There has been little discussion of the exogeneity/endogeneity of education variables in the literature, and there is no widespread consensus. Using a two-stage model, Thyne [50] claims that his education factors do not have any endogeneity concerns [6,17]. Brockoff, Krieger, and Meierrieks [9] use a two-step Hausman-type technique to make a similar point. ...
... Psychological ramifications included physical and mental anguish. In the majority of the country's largest cities, men, women, and children have died, and they have suffered mental, physical, and social trauma that has permanently altered their daily lives and personalities [6,32,45]. ...
Chapter
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Terrorism includes deliberate use of threat and violence by individuals or sub-national groups to achieve political goals. Terrorism affected developing countries far more than developed economies especially South Asian and African economies. This study is proposed to investigate the impact of terrorism on economic development. In addition to empirical literature, study analyses longitudinal panel data from the Global Terrorism Database for the economic development of 22 South Asian, South East Asian and South West Asian economies from 1990 to 2020. Proposed study estimated fixed effect panel estimation suggested that terrorism have negative and statistically significant influence on factors of economic development. This is the pioneer research to use the Global Terrorism Database to investigate the impact of terrorism on the economies of the South East and South West Asia as combined panel. The empirical findings have suggested significant implications for future research and practices, particularly in African countries. The findings of the study may encourage policymakers to devise effective counter-terrorism strategies while also strengthening regional ties.KeywordsTerrorismEconomic development
... The struggle for control of political or natural resources may lead to deprivation of one party which may implant grievance and animosities in ethnic and inter-regional association in the affected country. Similarly, parties deprived and displeased with the state of the economy and which lack the political power to effect institutional changes might be prone to terrorism (Blomberg et al., 2004). This may make the country ungovernable and lead to substantial drag in productive activities. ...
... Marginalization within countries and weak institution for conflict resolution were identified as key candidates for the significant decline in growth after 1975. Grievances among groups within a country about uneven distribution of country's economic prosperity often result in conflicts terrorism when changes through institutional procedure proves unrealizable (Blomberg et al., 2004). Such activity of terrorism dampened economic activities relative to environment with no terrorism. ...
Conference Paper
This study will carry out a comprehensive and analytical exploration of the relationship between conflict/political instability and economic growth using selected African countries. One key indicator to be explored is investment (both domestic and foreign) which is important to economic growth. As established in the literature, investment plays a pivotal role in the growth process. The occurrence of armed conflicts may discourage potential investment on one hand. It may not have substantial effect on investment given the return on such investment on the other hand.
... The most notable authors spearheading this point of view are the counterterrorism expert, Marc Sageman and the economist Alan Krueger (Krueger & Laitin, 2008;Sageman, 2004). From the other perspective, multiple authors have also found evidence that economic factors are correlated to violent extremism (Blomberg & Hess, 2005;Blomberg & Hess, 2004;Bravo & Dias, 2006;Burgoon, 2006;Enders & Hoover, 2012;Enders, Hoover, & Sandler, 2016;Freytag, Kruger, & Meierrieks, 2010;Kiendrebeogo & Ianchovichina, 2016;Li & Schaub, 2004). The strongest evidence to date of a global correlation between poverty and VE is from recent research by the economist Walter Enders (Enders & Hoover, 2012;Enders, Hoover, & Sandler, 2016). ...
... Unfortunately, once VE actors begin to infiltrate fragile states, potential investors are frightened away and limited state resources get diverted to military operations rather than desperately needed social services. This in turn creates a "trap like" effect, a vicious cycle, where fragile states begin a downward spiral into instability and conflict that becomes even more difficult and costly to extricate themselves from (Blomberg et al., 2004). ...
Technical Report
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This report explores drivers of violent extremism of youth in sub-saharan Africa and how those drivers connect to concept of resilience. It also proposed an updated push-pull model of violent extremism that proposed an additional psychological factors that effect decision making called "process factors". Thus, a push-pull-process factors model of violent extremism is proposed. The article also summarizes research and evidence supporting that poverty and lack of economic opportunity are core drivers pushing youth into violent extremism. The report integrates research from criminology and social psychology into the analysis of drivers of violent extremism. The report articulates critical life skills that can be reinforced to help youth resist the allure of violent extremism, including: self-regulatory skills; critical and complex thinking skills; positivity and hopefulness; moral development; prosocial values and empathy; self-efficacy and growth mindset. Impacts of globalization on violent extremism are also discussed.
... Our model may also speak to debates on radicalization and political violence. While most findings indicate that individual terrorists are unlikely to be drawn from the most economically deprived sectors, poor economic conditions are often correlated with higher rates of political violence (49)(50)(51)(52). Moreover, our model may help explain recent work showing that right-wing terrorism associated with group-based grievances is more sensitive to economic conditions and inequality than violence from left-wing groups promoting more universalistic ideologies (53). ...
... ,Freytag et al. (2011),Ismail and Amjad (2014), andLai (2007). Existing literature documents mixed results on the GDP-terrorism relationship.Blomberg et al. (2004) andIsmail and Amjad (2014) find a positive effect, Caruso and Schneider (2011), Lai (2007), and Nasir et al. (2011) find a negative effect, and finally, Boehmer and Daube (2013), Enders et al. (2016), Enders and Hoover (2012), and Freytag et al. (2011) find a U-shaped effect. Lastly, ( ) is military expenditures and has been used in the ...
Article
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This study aims to analyse the empirical background of securitisation in the European Union (EU). Using panel data, this research covers the period between 2006 and 2018 and analyses 24 EU countries. Copenhagen School claims that securitisation is a speech act of powerful actors. In the case of the EU, politicians and media are the main actors in the securitisation of immigration. In this respect, immigration has been labelled by these actors as a potential threat to the welfare state, European identity, and internal security. Various literature discusses that the securitisation of immigration in the EU has accelerated especially after 9/11. Contrary to the existing literature, this study focuses on the EU to analyse whether the securitisation of immigration has an empirical base. This study's key finding is that there is no solid empirical result to support the securitisation discourse in the EU to the extent that immigration strongly threatens national security.
... It has been exposed that insecurity predominantly affects economic growth negatively. Some studies have concluded the negative effects are more pronounced in developing countries where the reallocation of resources across different sectors of activity is less evident (Blomberg et al., 2004;Sandler & Enders, 2004;Gaibulloev & Sandler, 2009). Similarly, much other work has naturally asserted that terrorism has a negative effect on economic activity (Choi, 2015;Tahar et al., 2018). ...
Article
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Despite the growing literature on the determinants of inflation on the one hand and the effect of inflation on economic growth on the other hand, little is known about the role of insecurity in these analyses, particularly in the Central African countries. This paper aims to contribute to the understanding of other neglected aspects of inflation by analyzing both its origins and its effects on the economy through the role of the security situation. The use of the system GMM on a panel of Central African countries during the period 2011–2017 reveals that, apart from traditional sources (money supply, economic growth, and oil rent), insecurity is also one of the origins of inflation. Moreover, inflation promotes economic growth while insecurity hinders it. Finally, the results also show that the coexistence of inflation and insecurity significantly constrains the production capacity of the economies of the sub-region. Thus, the resolution of the various present conflicts (internal and border) and the anticipation of possible future ones will make it probably to control the level of inflation as well as to eliminate this constraint which limits the production capacity of the economies of Central Africa.
... Regarding control variables which could potentially affect the intensity of terrorist activity, some authors note on the importance of economic development (measured as GDP per capita, PPP) 2 (see Blomberg et al., 2004;Korotayev et al., 2021;Li and Schaub, 2004;Piazza, 2006), population size 3 (see, for example, Gassebner and Luechinger, 2011;Meierrieks, 2011, 2019), political regime 4 (see Chenoweth, 2013;Krieger and Meierrieks, 2019;Piazza, 2008), education 5 (Danzell et al., 2020;Elbakidze and Jih, 2015;Korotayev et al., 2021;Najeeb Shafiq and Sinno, 2010;Weber, 2019), civil war 6 (Findley et al., 2012), the share of oil rent 7 (Costello, 2017), population growth (see Note 7) (Coccia, 2018), unemployment rate (see Note 7) (Lee, 2011), and economic growth (see Note 7) (Gaibulloev et al., 2017). However, this list of control variables significantly decreased our final sample size, which also made us to consider a shorter set of control variables (see supporting Online Appendix 6). ...
Article
Both urbanization and a high share of youth (“youth bulge”) have been shown to correlate with higher levels of political violence, in general, and terrorism, in particular. In this article, we test the hypothesis that urbanization and general youth bulge (share of aged 15–29 in the adult population) should produce a particularly significant impact on the level of terrorist activity when acting together due to the interaction effect. Performed negative binomial regressions (both with and without interaction term) support this hypothesis. We also test the impact of “urban youth bulge” (share of urban youth in the total adult population), and it turns out to be a much more significant predictor of terrorism than either general youth bulge or urbanization taken separately. This finding is shown to have substantial practical implications, indicating that urban youth bulges are likely to retain their relevance in the forthcoming decades, in contrast to general youth bulges.
... Laurence R. Iannaccone and Eli Berman, "Religious extremism: The good, the bad, and the deadly", Public Choice, Springer, Vol. 128 (1) Some studies find that higher per capita incomes and domestic economic growth decreases the risk of different kinds of violence, including conflict, civil war and terrorism Malecková 2003, Blomberg, Hess andWeerapana 2004). ...
Article
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After the U.S. invasion of Afghanistan, the militants in the country adopted suicide bombing tactics and the war-torn country faced a new threat in the form of suicide terrorism. The main purpose of this research is to review the existing literature on the motives of suicide attackers, mostly from a political science perspective. For many scholars and state actors, it is hard to understand the acts of terrorists, especially suicide terrorists. Thus, suicide terrorism and an act of blowing oneself have often been conceived as "irrational" but many political scientists argue otherwise. Although most academics agree that there is no single motive for terrorists to conduct suicide attacks, a great number of previous researches on suicide terrorism in Afghanistan suggest that religion has played a significant role in promoting suicide bombings in the country. However, this paper argues that militants in Afghanistan conduct suicide attacks mainly for strategic reasons and it is used as a military tactic to challenge well-resourced opponents. In addition to addressing the role of strategic reasons, this article also analyzes other factors including religious, altruistic, economic motivations as well as military and political advantages instigating militants to become suicide bombers.
... It has been exposed that insecurity predominantly affects economic growth negatively. Some studies have concluded the negative effects are more pronounced in developing countries where the reallocation of resources across different sectors of activity is less evident (Blomberg et al., 2004;Sandler & Enders, 2004;Gaibulloev & Sandler, 2009). Similarly, much other work has naturally asserted that terrorism has a negative effect on economic activity (Choi, 2015;Tahar et al., 2018). ...
Article
Despite the growing literature on the political economy of trade protectionism, little is known about the effect of twin deficit on trade restrictions in general around the world and particularly in sub-Saharan Africa (SSA). The aim of this study is to fill this gap by assessing how twin deficit affects trade restrictions in SSA. We used a panel of 16 countries which recorded simultaneously and successively the current account deficit and the budget deficit during the period 2008–2018. The empirical evidence is based on the system Generalized Method of Moment (GMM). Our results show that the twin deficit is responsible for the upsurge of trade protectionism in sub-Saharan Africa.
... Many researchers such as Eckstein and Tsiddon (2004), Frey et al. (2007), Mirza and Verdier (2008), Sandler and Enders (2008) have defined the theoretical framework regarding various channels through which terrorism thwart economic growth and trade. Blomberg et al. (2004b and Gaibulloev and Sandler (2008) figure out that terrorism diverges economic activities such as trade, economic growth away from investment spending to government spending mainly for instituting non-productive defines structure against terrorist activities. Blomberg et al. (2004a, b) determine the various effect of terrorism on the economy, while Enders et al. (1990) found the efficiency of terrorist-impeding policies on slow down the incidence of terrorism. ...
Article
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Terror as well as terrorism could result in substantial levels of losses for any economy. This paper empirically examines the impact of terrorism on trade openness, renewable, fossil energy, and economic growth in the case of Pakistan over the period 1990–2017. We use the autoregressive distributive lag (ARDL), bound testing model, to explore the short and long-run relationship among trade openness, renewable energy, economic growth, fossil energy, and terrorism. The error correction model (ECM) reveals the short-run relationship between trade openness, economic growth, renewable and fossil energy, and terrorism. In general, we find economic growth on domestic terrorism is strong. We also find the terrorist activities decrease the trade volume. The findings suggest that terrorism has a negative influence on Pakistan’s economic growth and trade. Pakistan needs to make strict policies in terms of the utilization of more renewable energies, while, in the meantime, to resolve military and political differences with the help of its diplomatic channels specifically in the country and particularly in South Asia.
... The causal role of economic growth in demographic transitions is still the subject of some debate (e.g., Dyson, 2010), even more so the existence of an environmental Kuznets curve (Stern, 2004). Links between income and conflict are complex at best, e.g., with some finding a positive link between income and terrorism (Blomberg et al., 2004) and others finding a negative link between income shocks and civil conflict (Miguel et al., 2004). In short, the link between regular World Bank lending and international public goods is much more indirect and tenuous than the link between COVID World Bank lending and international public goods. ...
Article
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Do the normal rules of the game apply in international organizations during a global pandemic? We explore this question by comparing regular and COVID-19 World Bank loans. Analyzing lending from April 2, 2020 (the start of COVID-19 lending) to December 31, 2020, we find different results for the two types of World Bank loans. Looking at regular loans, countries that vote more in line with the U.S. on UN General Assembly resolutions are more likely to receive loans. For COVID-19 loans, geopolitics is not a significant factor. In contrast to ordinary business, the World Bank appears to have kept politics out of its pandemic response, instead more effectively focusing on provision of an important international public good.
... In another paper, the same authors (Abadie and Gardeazabal 2008) examined the impact of terror attacks on foreign direct investment (FDI), indicating that there is a negative relationship between country terror-risk and the flow of FDI; flows of FDI are likely to affect the price of the currency through the demand-supply channel. Bloomberg et al. (2004) also focused on the economic consequences of terrorism, documenting that the incidence of terrorism is negatively related to GDP growth; they find that a terror attack in a country is likely to reduce its GDP growth by 0.57% on average. Likewise, Gaibulloev and Sandler (2008) show that, in the period 1971-2004, terrorism has impaired economic growth in 18 Western European countries. ...
Article
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The objective of this paper is to examine whether terror attacks that took place in the Eurozone in the 21st century had a significant effect on the price of the Euro. Its novelty is twofold: it is the first study that assesses the impact of such events on the price of the Euro and employs a relatively large number of these events. The event-study methodology is used to deduce whether, after a terror event, the value of the Euro declines vs. other major currencies. We found that it does not, since following such an event, the decline was seldom over 0.5%. We also found, however, evidence of some diversion to safe-haven currencies, such as the Swiss Franc. Regression analysis revealed that factors such as the ‘number of attacks’, the ‘type of target’ and the ‘type of attack’, but not the number of casualties, affected the price of the Euro.
... The findings also revealed that one per cent increase in bombing attacks and armed assault would reduce LPICCP by 0.273 per cent and 0.013 per cent, respectively. The results are supported by previous studies (Gaibulloev & Sandler, 2008;Abadie & Gardeazabal, 2008;Blomberg et al., 2004;Bandyopadhyay et al., 2014). Due to bombing attacks and armed assault, customs authorities are not clear with shipments as per the federal government orders, which negatively affects the customs clearance process efficiency. ...
Article
In this study, we investigate how terrorism and risk create impacts on logistics performance in the SAARC (South Asian Association for Regional Cooperation) member countries. This study adopted FE (Fixed Effects) methods and RE (Random Effects) as robustness. The results indicate that bombing attacks have strongly negative impacts on all logistics indices including LPIQTTI (logistics performance index: Quality of trade and transport-related infrastructure), LPIQLS (logistics performance index: Competence and quality of logistics services), and LPICCP (logistics performance index: Efficiency of customs clearance process). Due to a higher level of terrorism in the SAARC countries particularly in Pakistan, Afghanistan, and India, quality of logistics services and transport-related infrastructure is poor and/or destroyed, which directly creates disruption and a long delay in a global logistics operation. Besides, terrorism results in shrinkage to the trade and investment opportunities; and poor logistical infrastructure causes the slowdown of the economic growth of SAARC countries. As this is first research for examining the impact of terrorism on logistics operations using macro-level indicators, it will assist the policymaker to understand the consequences of terrorism on the logistics industry and make protection plan for logistics operations such as after 9/11 attacks; US built C-TRAT (Customs-Trade Partnership against Terrorism) and CSI (Container Security Initiative).
... Our model may also speak to debates on radicalization and political violence. While most findings indicate that individual terrorists are unlikely to be drawn from the most economically deprived sectors, poor economic conditions are often correlated with higher rates of political violence (49)(50)(51)(52). Moreover, our model may help explain recent work showing that right-wing terrorism associated with group-based grievances is more sensitive to economic conditions and inequality than violence from left-wing groups promoting more universalistic ideologies (53). ...
Article
Full-text available
Social and political polarization is an important source of conflict in many societies. Understanding its causes has become a priority of scholars across disciplines. We demonstrate that shifts in socialization strategies analogous to political polarization can arise as a locally beneficial response to both rising wealth inequality and economic decline. In many contexts, interaction with diverse out-groups confers benefits from innovation and exploration greater than those that arise from interacting exclusively with a homogeneous in-group. However, when the economic environment favors risk aversion, a strategy of seeking lower-risk in-group interactions can be important to maintaining individual solvency. Our model shows that under conditions of economic decline or increasing inequality, some members of the population benefit from adopting a risk-averse, in-group favoring strategy. Moreover, we show that such in-group polarization can spread rapidly to the whole population and persist even when the conditions that produced it have reversed.
... Additionally, the ability of state institutions to insulate their populations from economic shocks is crucial. Blomberg et al. (2007) find that stronger institutions provide incentive for groups to use terrorism to change the status quo, since it is unlikely that a full rebellion would topple the state. ...
Article
This article sheds light on the root causes of terrorism by assessing the effect of food security on domestic terrorism among developing countries. Food security is a fundamental physiological need and captures a core well-being outcome. We argue that food insecurity creates grievances among citizens and increases demand among them for action against the government. Terrorist organisations provide the opportunity for citizens to channel their grievances against the government by resolving collective action problems and mobilising citizens. We demonstrate the link between food insecurity and domestic terrorism through quantitative analyses on a sample of 70 developing countries from 1980 to 2011. Our findings demonstrate the deleterious effects of food insecurity on peace in the developing world.
... Other studies have focused on different motivational questions, of whether economic deprivation, unemployment, corruption and poor governance tend to drive terrorist groups more than religious ideologies? It is in this sense that Susan Rice describes the poverty and insecurity nexus as a "doom spiral", and Colin Powell 9 states that "the war against terror is bound up in the war against poverty" (Brainard and Chollet 2006, p. 2), while in Blomberg et al. (2004), understanding the purpose of terrorist groups is to increase the economic voice of a group. Linking poverty to terrorism or poor governance has been dominant in terrorism literature (Kaplan 2015;McAllister and Schmid 2011;Sageman 2008;Schmid 2005;Li and Schaub 2004;Krueger and Maleckova 2003). ...
... Када се претпоставља да ће појединац повећати свој интертемпорални алат, како то може бити оптимално да се одрекну великог дела своје будуће корисности? (Rubbelke, 2009).5 Конфликт се може јавити у стањима као што су грађански ратови, устанци или тероризам, или између држава у виду ратова или побуна подржаних изван државе. ...
... Other studies have focused on different motivational questions, of whether economic deprivation, unemployment, corruption and poor governance tend to drive terrorist groups more than religious ideologies? It is in this sense that Susan Rice describes the poverty and insecurity nexus as a "doom spiral", and Colin Powell 9 states that "the war against terror is bound up in the war against poverty" (Brainard and Chollet 2006, p. 2), while in Blomberg et al. (2004), understanding the purpose of terrorist groups is to increase the economic voice of a group. Linking poverty to terrorism or poor governance has been dominant in terrorism literature (Kaplan 2015;McAllister and Schmid 2011;Sageman 2008;Schmid 2005;Li and Schaub 2004;Krueger and Maleckova 2003). ...
Article
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Is Boko Haram consistently motivated by the need for a territorial caliphate? That is, the creation of the Community of Ummah rather than religion as their envisioned motivation. We seek to take this question seriously due to a series of studies that have started drawing conclusions on the territorial goal of most terrorist organisations. One of such body of literature focuses on the relationship between terrorist groups’ proclivity for territory and ungoverned space, or the axiom that politics includes legitimate dominion over a spatial extension. Drawing extensively from the territorial assumptions as well as critical discourse analyses of speeches, we argue that the Community of Ummah in West Africa partly informs Boko Haram’s objective. This assertion found its clearest expression in the administration of Kannama village, the declaring of Gwoza as the Caliphate Headquarters and the use of Sambisa Forest and Lake Chad areas for sanctuaries, planning and executions of attacks and threats. Understanding Boko Haram’s geographical motivation has its merit of adopting a more offensive and proactive counterterrorism that aims at destroying terrorist resources, eliminating safe havens and undertaking actions that improve the retention of liberated spaces.
... Third, many of the independent variables included in our analyses are themselves potentially influenced by terrorist attacks. This is potentially true of indicators of national economic conditions (e.g., Blomberg et al., 2004), investments (e.g., Abadie & Gardeazabal, 2003), and democratic institutions (e.g., Li, 2005). To control for the possibility of reverse causality in the relationships between our variables, we lag all independent variables one year behind the dependent variable. ...
Article
Purpose This paper empirically examines the impact of terrorism on the insurance–growth relationship in the context of Middle East and North Africa (MENA) region, thereby attempting to address the unexplored area in the relevant literature. Design/methodology/approach The study considered MENA as it has been one of the terribly affected zones in the world during the study period. Panel data for the period (2002–2017) are sourced from reliable sources for 14 member economies of the MENA region. Findings After employing the suitable econometric procedures on the panel data, the results indicate that terrorism appears to have detrimental impact on the observed positive relationship between insurance and economic growth. In addition, trade openness seems to be the main driving force behind economic growth of the selected MENA countries. Surprisingly, the study suggests a negative association between the growth of physical capital and economic growth. Human capital has played a positive but insignificant role in improving economic growth as it is insignificant in majority of the specifications. The growth of labor force has although positively but insignificantly influenced economic growth. Finally, the results demonstrate that government expenditures and high inflation are harmful for growth. Originality/value The study investigated the impact of terrorism on the insurance–growth relationship for the first time, and hence policymakers of the MENA region are expected to be benefited enormously from the findings of the study.
Chapter
To what extent are terrorism and development related? What are the relative weights of the economic, political, and social aspects of development? What is the development impact of different responses to terrorism? This volume addresses these crucial questions, synthesizing what we know about the development links with terrorism and pointing out what we do not. Contributors to this volume examine the economic and fiscal costs of terrorism and the response to terrorism. They conclude that the economic costs of terrorism in rich countries are low, relative to the economic costs of combating terrorism; both are likely high in poor countries. They also report evidence on how development affects terrorism. This work supports the hypothesis that political development - political openness and the quality of government - is inversely associated with the emergence of terrorist organizations, but not that poverty per se is directly responsible for terrorism.
Chapter
This chapter documents the existing empirical evidence on a priori “fundamental causes” of terrorism, which include the so-called root causes like foreign occupation, poverty, deprivation of civil and political rights, economic inequality, discrimination, etc. as well as breeding-ground factors like ongoing conflicts that hamper the law and order environment and help terror organizations to breed and grow. It also reviews globalization as a propagative factor of transnational terrorism. Among many other results, it is shown that per-capita income and political/civil rights bear an inverted U-shaped relationship with the incidence of terrorism. Survey data implies that Islamophobia in the western countries like the USA may contribute toward radicalization of Muslim youth. Various statistical and econometric tools are briefly introduced.
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Counter-extremism (P/CVE) policies have shot to global prominence rapidly, yet there are large discrepancies in their implementation both between, and inside, countries. In this paper, we construct and present a robust index of P/CVE policies in Western countries (N = 38), based on data submitted by national experts, which we then use to test three hypothesized structural correlates of the extent of P/CVE implementation: threat of terrorism (measured as the number of past attacks/victims), size of Muslim minorities (Muslim communities have been “securitised” as potential threats in the post 9/11 period), and neoliberal governance (drawing on Criminological literature that connects neoliberalism to anticipatory crime control). We find the first two structural factors to be positively and significantly correlated to the intensity of P/CVE deployment, while neoliberal governance negatively and significantly. In the discussion, we highlight the usefulness of a complementary in-depth qualitative research inspired by these findings.
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This paper uses the event study methodology to examine whether ‘significant’ terror attacks that occurred in the Eurozone in the 21st century affect stock markets. We find that such events do have a negative effect both on the market of the country suffering the attack, and on the general Eurozone market index. Depending on the method and the market index used, this effect ranges between −0.3% and −0.62% and is concentrated entirely on the day of the attack. We moreover find that this effect is more pronounced and of significance during the first decade of the 21st century. Regression analysis revealed that the most important factor affecting the magnitude of the effect is economic damage resulting from the attack.
Article
Drawing from statements by politicians, the media, policy analysts, and researchers, the current study identifies nine myths associated with terrorism and the practice of counterterrorism. We focus on those myths that have special policy relevance since the four al‐Qaida hijackings on September 11, 2001, and the ensuing heightened security concern. Many of those myths generated research articles that, at times, come to contradictory conclusions. Our goal is to provide recent statistics and a literature evaluation to sort out such contradictory results. In the case of the alleged macroeconomic consequences of terrorism to a typical country, we supply updated estimations. Throughout our presentation, we draw from the post‐2001 literature or statistical evidence. Often, empirical methods and procedures have evolved to a point where more clear‐cut and robust findings are now available through better identification and advanced estimation procedures.
The economic literature indicates the substantial negative economic consequences of violent attacks on civilians by individuals or groups to advance political, religious, or ideological aims. However, research in psychology indicates people’s remarkable ability to develop psycho-physiological resilience following such attacks. This study explores whether this resilience might be expressed in the economic activity of people and their governments. Using the case of the ongoing Israeli-Palestinian conflict, we reveal that the previously documented adverse macroeconomic and capital market consequences of violence against civilians in Israel no longer exist in the past two decades. The evidence suggests that increased consumer confidence in the face of violence, together with the rapid growth in the Israeli economy, has reached a point where the violence poses an insignificant economic risk. We contribute to the literature by providing novel evidence about an economy outgrowing the negative externalities of violence against civilians. Given Israel’s well-developed economy and free markets, the findings of this study have broader implications for other developed countries.
Article
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This study examines complementarities between inclusive development, military expenditure and political stability in the fight against terrorism in 53 African countries for the period 1998-2012. Hence the policy variables employed in the study are inclusive development, military expenditure and political stability. The empirical evidence is based on Generalised Method of Moments (GMM) with forward orthogonal deviations. The paper reports three main findings. Firstly, military expenditure and inclusive development are substitutes and not complements. Secondly, it is more relevant to use political stability as a complement of inclusive development than to use inclusive development as a complement of political stability. Thirdly, it can be broadly established that military expenditure and political stability are complementary. In the light of the sequencing, complementarity and substitutability, when the three policy variables are viewed within the same framework, it is more feasible to first pursue political stability and then complement it with military expenditure and inclusive development.
Article
Purpose Terrorism is as old as humanity itself, but its new form in the twenty-first century is adversely affecting the performance of businesses in both developing and developed countries. The purpose of this study is to identify and analyse the evolution and diffusion of academic knowledge on the topic of terrorism in business-related literature. Design/methodology/approach Data was gathered from two databases, namely, the Scopus and Web of Science over 30 years (1990–2019). The search terms related to terrorism in titles, abstracts and authors’ keywords, which resulted in a total of 1,097 articles. Bibliometric methods, including a thematic and content analysis identifying main themes and using Gephi and VOSviewer software, were used to analyse the data. Findings The results reveal the productivity of the main actors, current thematic choices and future research opportunities. The main thematic areas of the research arising from the bibliometric analysis included the impact of terrorism on economic growth, Foreign Direct Investment, tourism, stock market reforms, security of multinational corporations as a result of terrorism and finally, the impact of political instability and terrorism on business. This study’s findings may guide the research of future academics and assist policy stakeholders in their strategic choices related to future business development. Research limitations/implications The study has certain limitations that are inherent to the bibliometric methods or to the choices related to data collection and processing. Practical implications This study recognised evolution and trends regarding the influence of terrorism on businesses, which is crucial information for the development of business and policy strategies in the future. These strategies should enhance the ability of businesses to cope with the negative effects of terrorism and make these effects less devastating. For academics, this study provides relevant insights on recent research trends in the field of terrorism in business and emerging future academic thematic opportunities. Social implications The findings of the study indicate that issues of terrorism in business have broader social implications, which both academia and policy stakeholders can attend with their work. Originality/value This bibliometric review offers new insights into terrorism from the business lens by identifying the common streams of research in the field, along with the key journals, articles, countries, institutions, authors, data sources and networks in this field. The future research directions in this field of knowledge are also articulated in the study.
Article
This paper studies the impact of terrorist attacks on the returns and volatility of Colombian stock returns using an event study methodology in a GARCH model framework. It also investigates the impact of the 2016 peace accord between the Colombian government and the FARC, an army of leftist narco-guerrillas, on the same characteristics of the financial market. Results show that the COLCAP index, a market-capitalization weighted index that includes the 25 most liquid stocks listed in the Colombia’s stock exchange, has a significant negative abnormal return of 0.1% 1 day after a bombing attack occurs, that continues to accumulate down to −0.18% 3 days after. Furthermore, events associated with the peace accord, exhibit a significant positive abnormal return of 0.58% on the event date that continues to accumulate up to 1.02% the day after. In addition, cumulative abnormal volatility (CAV) is statistically insignificant both after terrorist attacks and peace-associated events.
Article
We add to the ongoing discussion regarding the policy consequences of terrorism by analyzing the effect of terrorism on international economic policy for a panel of 170 countries between 1970 and 2016. We find that countries resort to less liberal international economic policies when facing the threat of terrorism. This effect is especially relevant to smaller (less populated) countries. Our main finding is robust to an instrumental-variable approach. We argue that governments pursue less liberal international economic policies in response to terrorism to interrupt the organization and financing of terrorism, limit capital flight, stabilize public finances and signal political resolve.
Article
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Özet: Terörizm ile büyüme arasındaki ilişkiyi sorgulayan çalış-malarda yaklaşım ve yöntem farklılıkları bulunmaktadır. Son yıllarda yapılan çalışmaların mekân farklılıklarını dikkate alan yöntemleri tercih ettiği görülmektedir. Diğer taraftan kurulan ekono-metrik modeller, terörün göstergesi olarak hangi değişkenin alınacağı sorusuna tatmin edici bir cevap verebilmiş değildir. Yaklaşım ve yöntem farklılıkları, zaten nicelik itibariyle sınırlı olan bu çalışmaların ortaya koyduğu bulguları mukayese etmeyi güçleştirmektedir. Bu farklılıklara rağmen bütün çalışmalar terörün büyümeyi negatif etkilediğine vurgu yapmaktadır. Çalışmaların bir diğer vurgusu, terör eylemlerinden kaynaklanan etkilerin zaman ve mekân itibariyle farklı olduğu şeklindedir. Anahtar Kelimeler: Terörizm, İktisadi Büyüme.
Article
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This study examines policy tools in the fight against terrorism when existing levels of terrorism matter in 53 African countries for the period 1998-2012. The empirical evidence is based on contemporary, non-contemporary and Instrumental Variable Quantile regressions (QR) which enable the investigation throughout the conditional distributions of domestic, transnational and total terrorism dynamics. The following findings are established. First, counterterrorism policy instruments of inclusive human development and military expenditure further fuel terrorim. Second, political stability negatively affects terrorism with a negative threshold effect. Political stability estimates are consistently significant with increasing negative magnitudes throughout the conditional distributions of domestic and total terrorism. Policy implications are discussed.
Article
This paper studies the impact of education on domestic terrorism in Asian countries from 1970 to 2018. A control function approach is utilized to address the endogeneity of education on terrorism. Generally speaking, results show that education promotes domestic terrorism in Asia. Negative binomial regressions with and without control function are run for other parts of world to examine whether the patterns in Asia hold worldwide. Other important determinants of domestic terrorism in Asia include regime type, ethnic fractionalization, linguistic fractionalization, religious fractionalization, GDP per capita, and trade openness. This paper contributes to the literature by 1) applying a control function approach to control for possible endogeneity of education on terrorism, 2) analyzing exclusively Asia, a region where terrorism has been increasing rapidly over the last decade, (3) and focusing on domestic terrorism.
Article
Using a unique dataset that merges terrorism activity with oil prices, this paper develops and tests the hypothesis that terrorist attacks predict oil prices. We develop three insights. First, we show that terrorist attacks have a positive effect on oil prices, but it is attacks originating from oil producer countries that most influence oil prices. Second, we devise trading strategies based on terrorist attacks and show that attacks, by signaling buying and selling in the market, beat a buy-and-hold strategy. We also show that a mean–variance investor who utilizes our terrorism-based forecasting model makes economically meaningful profits. Our analysis also shows that the effect of terrorism on oil prices operates via both the oil production and oil investment channels.
Article
This paper examines the democracy-terrorism linkage that can be distinguished at different stages of democracy. We first attempt to identify the level of democracy where terrorism is peaked, and then investigate if there is a significant reduction of terror incidents as a country advances to higher levels of democracy from the peaked level of terrorism. Using data from 124 countries covering the period 1984–2017, the study finds that the terrorism-increasing effect of democratization is peaked when a country is at the very middle level of democracy. Furthermore, there is evidence that terrorism may not be deterred as a country incrementally progresses to higher levels of democracy from the peak unless the country reaches the very highest level of democracy. The study also presents evidence that terror attacks become more prevalent with a lower level of economic development, a larger population, or an increase in instability of governance. However, economic growth, urbanization, and globalization are not significantly related to terrorism.
Thesis
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The International economic crime and the financing of terrorism are two phenomena that threaten the economy of a country in International level. The forms of economic crime, like the action of money laundering, is the form under which organized crime groups create large amounts of money. However the financing of terrorism, inside of International organized crime perform in order to cover the illegal source of funds. That is happening because these Funds have illegal provenance and every terrorist group wants to protect the course of lawful financing. The protection need due to the fact that the financing of terrorism has many similarities with the money laundering like the incorporation of the funds of the International financial system. Because of the “strong character” of the International organized crime, the Member states with the competent authorities should help to combat organized crime. The money laundering and the financing of terrorism are two important things that need prevention, detection and prosecution. For this reason, the European Union cooperate with competent authorities and the Organizations, like FATF, OLAF etc.
Article
Common belief holds that economic misery motivates more people to commit acts of suicide terrorism. The existing literature, however, fails to find an empirical linkage between these two phenomena. This study offers a novel theoretical perspective and statistical evidence on the economy and terrorism connection. I argue that Muslim women decide to engage in acts of suicide terrorism because of their perception of the national economy, rather than actual economic conditions such as gross domestic product per capita or the Gini index. Based upon a statistical analysis of 4,495 incidents of suicide terrorism during the period from 1981 to 2015, the study shows that, when Muslim women perceive their national economy to be unfavorable, they are more likely to commit acts of suicide terrorism.
Chapter
An international human rights regime is a major motivator of nation-states and peoples in the global war on transnational terror. It sets normative understandings for how citizens are treated—by their own governments, by each other, and by terrorist groups. A human rights regime also serves as a restraint on governments against brutal repressions in response to terrorism because terrorists are considered dissidents in extremis, and in all cases, the rules of law apply to them (and legal findings by governments are necessary before certain police or military actions may be taken). The contested roles of Information and Communication Technologies (ICT) in this dynamic context vary, but these technologies are used by all sides for their own objectives. This chapter explores the mixed roles of ICT in supporting a global human rights regime, which underpins the global war on transnational terror.
Thesis
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Policymakers in OECD countries regularly cite reducing political violence as a fundamental purpose of foreign aid. For example, countries such as Pakistan and Iraq have received considerable amounts of aid meant to address the root causes of political violence. This project analyzes quantitative and qualitative evidence to assess whether foreign aid can reduce political violence. The quantitative and qualitative analyses study Boko Haram in Nigeria and the Revolutionary United Front in Sierra Leone to focus on regional and country-wide political violence. The study further focuses on aid projects in Sierra Leone and Nigeria as a means to reduce or curb this violence. This paper finds evidence for aid projects playing a significant role in reducing political violence or reconsolidating a country after a conflict. However, this is highly contingent on the projects addressing and adequately understanding the needs in these countries. Note: This honors thesis began as a Ursinus College Summer Fellows project in June/July 2018. Sections on the following pages are taken from Rohrer (2018): pgs. 7, 14-16, 22
Conference Paper
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Policymakers in OECD countries regularly cite reducing terrorism as a key purpose of foreign aid. Countries with a high number of terrorist incidents such as Pakistan, Afghanistan, and Iraq have received considerable amounts of aid meant to address the root causes of terrorism and political violence. However, there is some debate on whether aid can achieve this purpose. This paper analyzes quantitative and qualitative evidence to assess whether foreign aid can reduce terrorist activity. It specifically examines whether developmental assistance can reduce the amount of terrorist violence in a country through addressing political and economic grievances. Building on existing literature, the paper hypothesizes that foreign aid will reduce terrorist violence. However, this relationship is likely conditional on existing institutions as well as the success record of projects. Corruption can mitigate the positive impact of aid. Data on foreign aid and terrorist violence in 36 African countries from 1970 to 2013 are analyzed to test this hypothesis. The quantitative analysis found that an increase in foreign aid is associated with less terrorist activity, however, there was not enough evidence to conclude that lower grievances are associated with less terrorism. Additionally, there was not enough evidence to conclude that foreign aid is able to address grievances. Case studies of the role of foreign aid in Kenya and Nigeria provide further detail on the role of aid for terrorist activities. These case studies showed that the decrease in foreign aid can in turn increase terrorist attacks as seen in Nigeria. Conversely, in the case of Kenya, foreign aid is high, however, attacks are as well. Throughout, this research finds that foreign aid is able to reduce terrorism, however, this depends heavily on existing policy and institutions. Additionally, the case studies as well as existing literature show that grievances play an important role in terms of motivating terrorism. Unfortunately, I did not find enough evidence to support that foreign aid is able to address these grievances and in turn lower terrorism. This will allow the foreign policy community to better understand the impact foreign aid has on terrorist violence, allowing possible improvement. The findings of this research show that foreign aid can have an impact on terrorism. Possible improvement may include strengthening institutions and policies in aid-receiving nations as well as further targeting grievances in nations with foreign aid.
Article
Purpose This paper aims to assess the effects of different levels of education, namely, primary, secondary and tertiary, on global terrorism, measured by incidence of global terrorism. Design/methodology/approach Based on annual panel data covering 120 countries from 1990 to 2017, zero-inflated negative binomial regression (NBR) model is applied to estimate relationship between education and terrorism. Findings The findings reveal that higher attainment of education at primary and secondary level lowers terrorism worldwide. The findings strongly hold across the most affected regions of the world including Middle East and North Africa, South Asia, Sub-Saharan Africa and Europe. Drawing a comparison between the OECD and non-OECD countries, the results are substantially supported throughout. Research limitations/implications This study highlights the significance of education, at least up to secondary level, as an effective measure to reduce the extent of terrorist activities worldwide. Apart from this, more focus on education is recommended across the most affected regions (Middle East and North Africa, South Asia and Sub-Saharan Africa), specifically and the world, generally. Furthermore, as this study focuses at macro level, the future research may focus on factors enforcing individuals to resort to terrorism at individual and group level. Originality/value Unlike previous studies, this study contributes to existing literature through investigating the impact of terrorism at different levels of education.
Article
Natural factors such as geological conditions, climate change, and depletion of mineral resources may affect economic sustainability and development. Natural resource degradation increases global challenges such as scarcity of resources, water, and land; hence, countries are exposed to natural disasters. Nevertheless, do natural disasters cause a rise in terrorist attacks? In general, terrorist attacks cause death, suffering, and severely affect social and economic situations, as well as national politics. The determinants of terrorist events are a popular issue globally that attract both researchers and policymakers. This research involved a structured methodology using a panel logit model between natural disaster and terrorism. It covered the binary data of terrorist attacks, which allowed the researchers to recognize the determinants that could lead to conflict. Based on the research of detailed data of 127 countries between 1970 and 2014, it was found that there is a strong positive relationship between the total number of deaths and the total occurrences of natural disasters and terrorist attacks. On the other hand, the total damage caused by natural disasters has a significant negative relationship with terrorist attacks. For other variables, the result gives a consistent significant relationship. From the findings, it may be concluded that rapid occurrences of natural disasters will increase the risk of terrorist attacks.
Article
This research presents analysis for identifying common risk and resilience factors that contributed to or hindered Salafi jihadi mobilization of citizens of Central Asia and the South Caucasus and examines the extent to which these factors had differing internal and external outcomes on Salafi jihadi mobilization. Three levels of analysis provide examination of regime characteristics, behavior of jihadi organizations that mobilized individuals from the region, and case studies through interviews in communities affected by jihadi mobilization in Kyrgyzstan and Georgia. This research reveals that early distinctions in Islamist subnational struggles had oriented violence towards governments within Central Asia, while neighboring struggles in the North Caucasus oriented jihadi participants from Azerbaijan and Georgia largely towards external authorities in the north. Further, this research suggests that the dual phenomena of domestic jihadi manifestation of violence and foreign fighter mobilization to external theatres are inversely related and affected by the patterns of jihadi organizational displacement, co-location with larger entities engaged in conflict abroad, and expansion of organizations seeking new members within these external jihadi theatres. Additionally, state behavior, including state coercive capacity, solidification of elite cooperation, and regime legitimation through the construction of well-curated national identities, has served as a strengthening bulwark against jihadi organizational effectiveness internally in the region. Yet, interview data from this study indicates that state behavior has also engendered notable grievances among ethnic and religious minority populations in areas of jihadi foreign fighter origin. Despite these society-fragmenting perceptions of injustice, prejudice, and lack of trust in governance, grievances have not galvanized into viable sustained internal jihadi action throughout the region. Rather, this research suggests that punitive state pressures on outgroups and patterns of economic migration across the entire population have contributed to a venting process that limits the potential manpower available for internal violent agendas. Yet this same venting process presents some individuals avenues for jihadi mobilization, strengthening the recruitment possibilities for offshore jihadi organizations.
Article
Full-text available
This study examines complementarities between inclusive development, military expenditure and political stability in the fight against terrorism in 53 African countries for the period 1998-2012. Hence the policy variables employed in the study are inclusive development, military expenditure and political stability. The empirical evidence is based on Generalised Method of Moments (GMM) with forward orthogonal deviations. The paper reports three main findings. Firstly, military expenditure and inclusive development are substitutes and not complements. Secondly, it is more relevant to use political stability as a complement of inclusive development than to use inclusive development as a complement of political stability. Thirdly, it can be broadly established that military expenditure and political stability are complementary. In the light of the sequencing, complementarity and substitutability, when the three policy variables are viewed within the same framework, it is more feasible to first pursue political stability and then complement it with military expenditure and inclusive development.
Article
Full-text available
This study examines policy tools in the fight against terrorism when existing levels of terrorism matter in 53 African countries for the period 1998-2012. The empirical evidence is based on contemporary, non-contemporary and Instrumental Variable Quantile regressions (QR) which enable the investigation throughout the conditional distributions of domestic, transnational and total terrorism dynamics. The following findings are established. First, counterterrorism policy instruments of inclusive human development and military expenditure further fuel terrorim. Second, political stability negatively affects terrorism with a negative threshold effect. Political stability estimates are consistently significant with increasing negative magnitudes throughout the conditional distributions of domestic and total terrorism. Policy implications are discussed.
Article
Full-text available
Data from 152 countries from 1950 to 1992 are used to estimate the joint determination of external conflict, internal conflict, and the business cycle. Results show that the occurrence of a recession alone will significantly increase the probability of internal conflict, and when combined with the occurrence of an external conflict, recessions will further increase the probability of internal conflict. These results are obtained from estimates of a Markov probability model in which transitions between states of peace and conflict influence each other and the state of the economy. Strong evidence emerges that the internal conflict, external conflict, and the state of the economy are not independent of one another. The results suggest that recessions can provide the spark for increased probabilities of internal and external conflict, which in turn raise the probability of recessions. Such dynamics are suggestive of a poverty-conflict trap-like environment.
Article
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The Penn World Table displays a set of national accounts economic time series covering many countries. Its expenditure entries are denominated in a common set of prices in a common currency so that real quantity comparisons can be made, both between countries and over time. It also provides information about relative prices within and between countries, as well as demographic data and capital stock estimates. This updated, revised, and expanded Mark 5 version of the table includes more countries, years, and variables of interest to economic researchers. The Table is available on personal computer diskettes and through BITNET.
Article
Throughout the post-World War II period the president has been called upon to make decisions concerning the use of force as a political instrument. The explanation that is offered is based upon a characterization of the president as a cybernetic human decision maker facing limitations. These limitations, in conjunction with the complexity of the environment, lead presidents to develop and use a relatively simple decision rule. The dependent variable, which is the probability of the use of force at any point in time, is explained in terms of enduring and essential concerns, which are operationalized as coming from the international, domestic, and personal environments. Data are taken from Blechman and Kaplan's Force Without War. On the basis of our estimation and evaluation, presidential decisions to use force are based on factors in all three arenas.
Article
Using quarterly data from 1968 to 1988, we analyze the time series properties of the various attack modes used by transnational terrorists. Combining vector autoregression and intervention analysis, we find strong evidence of both substitutes and complements among the attack modes. We also evaluate the effectiveness of six policies designed to thwart terrorism. The existence of complements and substitutes means that policies designed to reduce one type of attack may affect other attack modes. For example, the installation of metal detectors in airports reduced skyjackings and diplomatic incidents but increased other kinds of hostage attacks (barricade missions, kidnappings) and assassinations. In the long run, embassy fortification decreased barricade missions but increased assassinations. The Reagan “get tough” policy, which resulted in the enactment of two laws in 1984 and a retaliatory raid on Libya in 1986, did not have any noticeable long-term effect on curbing terrorist attacks directed against U.S. interests.
Article
This study tests the validity of opposing arguments regarding superpower state sponsorship of international crises by exploring the linkages between the monthly foreign policy crisis behavior of nation-states and the occurrence of international terrorism over a 228-month period from 1968 to 1986 using data drawn from ITERATE 2 and 3 and the International Crisis Behavior (ICB) data sets. Using time-series ARIMA modelling techniques, superpower involvement in international crises, attitudes toward superpower crisis intervention, and the victory and defeat patterns of democracies and nondemocracies are considered for their short-term and long-term influences on the amount and occurrence of international terrorism in the global system. The analysis lends support to the view that the Soviet Union and other authoritarian regimes are more likely than the U.S. and other democracies to resort to international terrorism as a foreign policy tool.
Article
Students of international politics have often argued that state leaders initiate the use of force internationally to divert attention away from domestic problems. The author contends that these arguments concerning the relationship between domestic unrest and international conflict are not supported empirically because they focus too narrowly on the incentives state leaders have to use external force as a diversionary tactic without considering alternative solutions to quieting domestic unrest. It is hypothesized that democratic leaders will respond to domestic unrest by diverting attention by using force internationally. On the other hand, authoritarian leaders are expected to repress the unrest directly, and these acts of repression will make them less likely to use force internationally. An analysis of the initiation of force by the challenging states in 180 international crises between 1948 and 1982 strongly supports these hypotheses. The results of the analyses and their implications for the literature on diversionary conflicts and the rapidly growing literature on democratic peace are discussed.
Article
It is conventional wisdom that the public rallies 'round the president when military force is used abroad. Indeed, this belief has encouraged the view that presidents are apt to rattle the saber to divert attention from domestic problems. The rally effect is assessed by measuring the change in the president's popularity following all major uses of force by the United States from 1950 through 1984. Surprisingly, for these 102 cases, the mean change in the president's approval rating is 0%, even among the members of his party. Even well-publicized uses of force during a crisis boost the president's standing only 2%-3% on average. Regression analyses confirm that the rallying effect of a use of force is greater in a crisis and when the action is prominently reported by the media. In addition, rallies are greater when the president enjoys bipartisan support, his initial popularity is low, and the country is not at war or fatigued by war.
Article
A number of recent studies have investigated relationships between the presidential election cycle and the implementation of various policies. This article falls in this tradition, and asks whether a link exists between the reelection efforts of presidents, and the visible use of military force by the United States. After outlining why, and under what conditions, such a connection can be expected, a multivariate statistical model is tested for the time period 1947-1982. Despite the presence of several control variables, the results indicate that there is a connection, with fewer visible uses of force associated with presidential reelections in peacetime, and a slight increase in uses of force associated with presidential reelections during wartime.
Article
This paper employs intervention or interrupted time series analysis to assess the effectiveness of four specific terrorist‐thwarting policies undertaken between January 5,1973 and April 15,1986. These policies include the following: (1) installation of metal detectors in airports, (2) enhanced security for U.S. embassies and personnel, (3) the legislation of the Reagan “get‐tough” laws on terrorism, and (4) the U.S. retaliatory strike against Libya. The use of intervention analysis allows for a study of the dynamic realization of a policy. Both short‐, medium‐, and long‐run effects can be ascertained. The most successful policy involved metal detectors. Expenditures to secure U.S. embassies had the intended effect, but it also had the unintended effect of putting non‐U.S. diplomats at somewhat greater risk. The Reagen get‐tough laws were ineffective. Unfortunately, the Libyan raid had the unintended effect of increasing U.S. and U.K. attacks temporarily.
Article
Supreme values, being absolutely true to believers, have to be preferred to all else, and can require acts of terror in which terrorists are willing to take the lives of others and also give up their own lives to further the sought objectives. It is therefore difficult to prevent terrorism based on supreme values. A model shows how supreme-value terrorism increases with resources available to terrorists and changes with other parameters. The model is used to consider how supreme-value terror can be fought. Solutions include decentralization and isolation of terrorists from free society, including through selective immigration. Because the supreme values contradict the values of a free society, the spiritual fight is crucial, which requires preventing domestic dissemination of the supreme values by controlling the education process. The solutions are difficult for a free society.
Article
This paper investigates the relationship between the business cycle, the election cycle, and the timing and magnitude of foreign conflict. We propose a theoretical model which suggests that in the presence of a reelection motive, the frequency of war will be greater following recessions than otherwise. However, if partially benevolent leaders can influence the size of conflicts, then the consequences may be limited to conflicts of relatively small magnitude. We test the predictions of the theory using data for the United States for the Cold War period, and obtain results consistent with the theory when leaders are partially benevolent.
Article
This paper presents an analysis of terrorism based on a signalling game in which an uninformed government uses the first-period attacks of the (informed) terrorist to assess terrorists' capabilities. Based on posterior beliefs, the government decides in period 2 whether to resist or to capitulate. A perfect Bayesian equilibrium for the two-period signalling game is derived in which the government prefers the associated partial-pooling equilibrium over the never-surrender equilibrium. This pooling equilibrium is associated with probabilistic regret owing to ex post wrong inferences. Intelligence is valued, because it can limit this regret if it can reduce the variance of government priors.
Article
The aim of this paper is to analyse some macroeconomic channels operating in a war economy. At the theoretical level, the effects of such war on the key economic variables capital, technology, uncertainty, and the government's fiscal deficit are discussed before proceeding to the analysis of individuals, firms and the government. These elements are combined in a dynamic macroeconomic model to study a war's impact on output, growth, consumption, welfare and the national debt. The final section of this paper considers economic policy implications for a government at war, and for donors supporting a war economy. Both the theory and the evidence, drawn from Mozambique, suggest that while capital destruction is the most obvious cost of conflict the long-term development potential of a war economy is more severely damaged by increases in the fiscal deficit, uncertainty and transactions inefficiency. Furthermore, economic policies implemented during a war will determine the size and nature of the country's long-term peace dividend.
Article
The Penn World Table displays a set of national accounts economic time series covering many countries. Its expenditure entries are denominated in a common set of prices in a common currency so that real quantity comparisons can be made, both between countries and over time. It also provides information about relative prices within and between countries, as well as demographic data and capital stock estimates. This updated, revised, and expanded Mark 5 version of the table includes more countries, years, and variables of interest to economic researchers. The Table is available on personal computer diskettes and through BITNET.
Article
The frequency of foreign conflict initiations in the United States is found to be significantly greater following the onset of recessions during a president's first term than in other periods. The authors develop an economic theory of the political use of wars which links the election cycle, war decisions, and economic performance consistent with the observed relationships among these events. An incumbent leader with an unfavorable economic performance record may initiate a war to force the learning of his war leadership abilities and thus salvage, with some probability, his reelection. This obtains despite voter rationality and informational symmetry. Copyright 1995 by American Economic Association.
Article
This paper develops a positive theory of insurrections that treats insurrection and its deterrence or suppression as economic activities that compete with production for scarce resources. The general equilibrium analytical framework reveals how the allocation of labor time among insurrection, soldiering, and production and the probabilistic distribution of income between the peasant families and the ruler's clientele both depend on the technology of insurrection. A central result is that equilibria with more time allocated to insurrection and a higher probability of a successful insurrection have lower production and total income, but nevertheless can have higher expected income for the peasants. Copyright 1991 by American Economic Association.
A general equilibrium model of insurrections War politics: an economic, rational-voter framework Economic conditions, elections and the magnitude of foreign conflicts
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