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Terrorism From Within: An Economic Model of Terrorism

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Author Info
S. Brock Blomberg (Wellesley College)
Gregory D. Hess (Claremont McKenna College)
Akila Weerapana (Wellesley College)

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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.

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Publisher Info
Paper provided by Claremont Colleges in its series Claremont Colleges Working Papers with number 2002-14.

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Date of creation: Aug 2002
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Handle: RePEc:clm:clmeco:2002-14

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Related research
Keywords: Growth Terrorism Political Economy

Find related papers by JEL classification:
H1 - Public Economics - - Structure and Scope of Government
H5 - Public Economics - - National Government Expenditures and Related Policies
H8 - Public Economics - - Miscellaneous Issues

This paper has been announced in the following NEP Reports:

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Tornell, A., 1998. "Reform from Within," Papers 650, Harvard - Institute for International Development.
  2. Aaron Tornell, 1998. "Reform from Within," Harvard Institute of Economic Research Working Papers 1827, Harvard - Institute of Economic Research.
  3. Lapan, Harvey E. & Sandler, Todd, 2003. "Terrorism and Signalling," Staff General Research Papers 10808, Iowa State University, Department of Economics.
    Other versions:
  4. Hess, Gregory D & Orphanides, Athanasios, 1995. "War Politics: An Economic, Rational-Voter Framework," American Economic Review, American Economic Association, vol. 85(4), pages 828-46, September. [Downloadable!] (restricted)
  5. Aaron Tornell, 1998. "Reform from Within," NBER Working Papers 6497, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  6. Lapan, Harvey E & Sandler, Todd, 1988. "To Bargain or Not to Bargain: That Is the Question," American Economic Review, American Economic Association, vol. 78(2), pages 16-21, May. [Downloadable!] (restricted)
    Other versions:
  7. Grossman, Herschel I, 1991. "A General Equilibrium Model of Insurrections," American Economic Review, American Economic Association, vol. 81(4), pages 912-21, September. [Downloadable!] (restricted)
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Tim Krieger & Stefan Traub, 2008. "Back to Bismarck? Shifting Preferences for Intragenerational Redistribution in OECD Pension Systems," Working Papers 13, University of Paderborn, CIE Center for International Economics. [Downloadable!]
  2. Tilman Brück & Bengt-Arne Wickström, 2004. "The Economic Consequences of Terror: A Brief Survey," HiCN Working Papers 03, Households in Conflict Network. [Downloadable!]
  3. Edna Carolina Sastoque Ramírez & Mario García Molina, 2007. "Pasiones e intereses: las causas de la guerra civil de 1876-1877 en el Estado Soberano de Santander," DOCUMENTOS DE TRABAJO (UEC) 003962, UNIVERSIDAD EXTERNADO DE COLOMBIA. [Downloadable!]
  4. Tim Krieger & Daniel Meierrieks, 2008. "What causes terrorism?," Working Papers 12, University of Paderborn, CIE Center for International Economics. [Downloadable!]
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