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Economic Conditions and Terrorism
Source: www.wellesley.edu
Topic: Economic Conditions
Sort Desciption: Economic Conditions and Terrorism. S. Brock Blomberg. a. Gregory D. Hess. b. Akila Weerapana. c. a. Claremont McKenna College ...
Content Inside: Economic Conditions and Terrorism S. Brock Blomberg a Gregory D. Hess b Akila Weerapana c a Claremont McKenna College b Claremont McKenna College and CESifo c Wellesley College Submitted May 2002; Revised August 2002; Accepted April 2003. Abstract In this paper we develop and explore the implications of an economic model that links the incidence of terrorism in a country to the economic circumstances facing that country. We briefly sketch out a theory in the spirit of Tornell (1998) that describes terrorist activities as being initiated by groups that are unhappy with the current economic status quo yet unable to bring about drastic political and institutional changes that can improve their situation. Such groups with limited access to opportunity may find it rational to engage in terrorist activities. The result is then 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 (i.e. recessions) can provide the spark for increased probabilities of terrorist activities. JEL Codes: H3 N4 Keywords: Growth Terrorism Political Economy Corresponding author: Russell S. Bock Professor of Public Economics Claremont McKenna College 500 E. 9th Street Bauer Center Claremont CA 91711.E-mail: gregory.hess@claremontmckenna.edu tel: (909) 607 - 3686 fax: (909) 621 - 8249. 1 Introduction In this paper we first outline a simple theory that provides structure for thinking about the channels through which economic outcomes can influence terrorist activities and then examine empirically the presence of these channels by constructing and employing a rich panel data set of 127 countries from 1968 to 1991. Our analysis investigates the importance of standard economic variables such as GDP growth per capita an ...
economic conditions influence terrorism
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