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The Adverse Effect of Transnational and Domestic Terrorism on Growth in Africa

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Author Info

  • Khusrav Gaibulloev

    (Department of Economics, Kazakhstan Institute of Management, Economics and Strategic Research)

  • Todd Sandier

    ()
    (School of Economic, Political & Policy Sciences, University of Texas at Dallas)

Abstract

This article investigates the adverse effects of domestic and transnational terrorism on income per capita growth for 51 African countries for 1970-2007, while accounting for cross-sectional (spatial) dependence and conflict (i.e. internal conflicts and external wars). The findings of the fixed-effects panel estimator suggest that transnational terrorism has a significant, but modest, marginal impact on income per capita growth. These results hold for two different terrorism event datasets. However, domestic terrorist events do not affect income per capita growth. Our findings differ from those in an earlier study on the impact of transnational terrorism on African growth, because we uncover a much more moderate effect. In our study, regional impacts and terrorism-conflict interactions effects are also distinguished. Moreover, our sample countries and period are more extensive. Our article contains a host of robustness checks involving macroeconomic and political variables that find virtually identical results. Alternative terrorist variables are also used, with little qualitative change in the findings. The absence of a domestic terrorism impact is surprising because there were many more domestic than transnational terrorist incidents in Africa. To promote growth, host and donor countries must direct scarce counter-terrorism resources to protect against transnational terrorism in particular. The modest impact of transnational terrorism on African growth means that developing countries’ economies have been more resilient to terrorism than has been generally thought.

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Bibliographic Info

Article provided by Peace Research Institute Oslo in its journal Journal of Peace Research.

Volume (Year): 48 (2011)
Issue (Month): 3 (May)
Pages: 355-371

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Handle: RePEc:sae:joupea:v:48:y:2011:i:3:p:355-371

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Web page: http://www.prio.no/

Related research

Keywords: conflict; domestic terrorism; fixed-effects panel; growth in Africa; transnational terrorism;

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Cited by:
  1. Mario Jovanovic, 2011. "Financial Uncertainty in Germany and its Impact on Western European Terrorism," Ruhr Economic Papers 0296, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.
  2. Bassil Charbel, 2013. "Macroeconomic Consequences of War and Terrorism in Lebanon," Peace Economics, Peace Science, and Public Policy, De Gruyter, vol. 19(3), pages 415-429, December.
  3. Amar Iqbal ANWAR & Mazhar Yasin MUGHAL, 2013. "Foreign Financial Flows and Terrorism in Developing Countries," Working Papers 2013-2014_1, CATT - UPPA - Université de Pau et des Pays de l'Adour, revised Sep 2013.
  4. Khusrav Gaibulloev & Todd Sandler & Donggyu Sul, . "Reevaluating Terrorism and Economic Growth: Dynamic Panel Analysis and Cross-Sectional Dependence," Economics Working Papers 02-03/2013, School of Business Administration, American University of Sharjah.
  5. Subhayu Bandyopadhyay & Todd Sandler, 2011. "Immigration policy and counterterrorism," Working Papers 2011-012, Federal Reserve Bank of St. Louis.

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