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International Terrorism, Political Instability and the Escalation Effect

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Author Info
Campos, Nauro F.
Gassebner, Martin

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Abstract

What are the main causes of international terrorism? The lessons from the surge of academic research that followed 9/11 remain elusive. The careful investigation of the relative roles of economic and political conditions did little to change the fact that existing econometric estimates diverge in size, sign and significance. In this paper we present a new rationale (the escalation effect) stressing domestic political instability as the main reason for international terrorism. Econometric evidence from a panel of more than 130 countries (yearly from 1968 to 2003) shows this to be a much more promising avenue for future research than the available alternatives.

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Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 7226.

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Date of creation: Mar 2009
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Handle: RePEc:cpr:ceprdp:7226

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Related research
Keywords: escalation; international terrorism; political instability; terrorism;

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Find related papers by JEL classification:
C25 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Discrete Regression and Qualitative Choice Models
D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Models of Political Processes: Rent-seeking, Elections, Legislatures, and Voting Behavior
F59 - International Economics - - International Relations and International Political Economy - - - Other
H56 - Public Economics - - National Government Expenditures and Related Policies - - - National Security and War
P48 - Economic Systems - - Other Economic Systems - - - Other Economic Systems: Political Economy; Legal Institutions; Property Rights

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    Other versions:
  2. Peter Kurrild-Klitgaard & Mogens Justesen & Robert Klemmensen, 2006. "The political economy of freedom, democracy and transnational terrorism," Public Choice, Springer, vol. 128(1), pages 289-315, July. [Downloadable!] (restricted)
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  6. Dreher, Axel & Gassebner, Martin, 2008. "Does political proximity to the U.S. cause terror?," Economics Letters, Elsevier, vol. 99(1), pages 27-29, April. [Downloadable!] (restricted)
  7. Ana Bela Santos Bravo & Carlos Manuel Mendes Dias, 2006. "An Empirical Analysis Of Terrorism: Deprivation, Islamism And Geopolitical Factors," Defence and Peace Economics, Taylor and Francis Journals, vol. 17(4), pages 329-341, August. [Downloadable!] (restricted)
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  9. Campos, Nauro F. & Nugent, Jeffrey B., 2002. "Who is afraid of political instability?," Journal of Development Economics, Elsevier, vol. 67(1), pages 157-172, February. [Downloadable!] (restricted)
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  10. Blomberg, S. Brock & Hess, Gregory D. & Weerapana, Akila, 2004. "Economic conditions and terrorism," European Journal of Political Economy, Elsevier, vol. 20(2), pages 463-478, June. [Downloadable!] (restricted)
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  14. Llussá, Fernanda & Tavares, José, 2007. "Economics and Terrorism: What We Know, What We Should Know and the Data We Need," CEPR Discussion Papers 6509, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
  15. Eli Berman & David D. Laitin, 2008. "Religion, Terrorism and Public Goods: Testing the Club Model," NBER Working Papers 13725, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  16. Chamberlain, Gary, 1980. "Analysis of Covariance with Qualitative Data," Review of Economic Studies, Blackwell Publishing, vol. 47(1), pages 225-38, January. [Downloadable!] (restricted)
  17. Bruno S. Frey & Simon Luechinger & Alois Stutzer, 2007. "Calculating Tragedy: Assessing The Costs Of Terrorism," Journal of Economic Surveys, Blackwell Publishing, vol. 21(1), pages 1-24, 02. [Downloadable!] (restricted)
    Other versions:
  18. Ai, Chunrong & Norton, Edward C., 2003. "Interaction terms in logit and probit models," Economics Letters, Elsevier, vol. 80(1), pages 123-129, July. [Downloadable!] (restricted)
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