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Does Terrorism Work?

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  • Eric D. Gould
  • Esteban F. Klor

Abstract

This paper examines whether terrorism is an effective tool to achieve political goals. By exploiting variation in terror attacks over time and across locations in Israel from 1984 to 2006, we show that local terror attacks cause Israelis to be: (i) more willing to grant territorial concessions to the Palestinians; (ii) more willing to accept a Palestinian state; (iii) less likely to identify oneself as being right-wing; and (iv) more likely to have a favorable opinion of Arabs. These effects are especially pronounced for individuals from particular demographic groups which are typically right-wing in their political views. In addition, we show that terror induces Israelis to vote increasingly for right-wing parties. This pattern of results demonstrates that right-wing parties are becoming more accommodating to Palestinian demands for territorial concessions. Hence, this paper shows that terrorism appears to be an effective strategy in terms of shifting the entire Israeli political landscape to the left. These findings may shed light on the causes underlying the spread of global terrorism in the last few decades.

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File URL: http://www.diw.de/documents/publikationen/73/diw_01.c.354138.de/diw_econsec0012.pdf
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Bibliographic Info

Paper provided by DIW Berlin, German Institute for Economic Research in its series Economics of Security Working Paper Series with number 12.

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Length: 41, 17 p.
Date of creation: 2009
Date of revision:
Handle: RePEc:diw:diweos:diweos12

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  1. Radha Iyengar & Jonathan Monten, 2008. "Is There an "Emboldenment" Effect? Evidence from the Insurgency in Iraq," NBER Working Papers 13839, National Bureau of Economic Research, Inc.
  2. Claude Berrebi & Esteban F. Klor, 2004. "On Terrorism and Electoral Outcomes: Theory and Evidence from the Israeli-Palestinian Conflict," Working Papers, Princeton University, Department of Economics, Industrial Relations Section. 4, Princeton University, Department of Economics, Industrial Relations Section..
  3. Abadie, Alberto, 2004. "Poverty, Political Freedom, and the Roots of Terrorism," Working Paper Series, Harvard University, John F. Kennedy School of Government rwp04-043, Harvard University, John F. Kennedy School of Government.
  4. Gary S. Becker & Yona Rubinstein, 2011. "Fear and the Response to Terrorism: An Economic Analysis," CEP Discussion Papers, Centre for Economic Performance, LSE dp1079, Centre for Economic Performance, LSE.
  5. Bruno S. Frey & Dominik Rohner, 2006. "Blood and Ink! The Common-Interest-GameBetween Terrorists and the Media," IEW - Working Papers, Institute for Empirical Research in Economics - University of Zurich 285, Institute for Empirical Research in Economics - University of Zurich.
  6. Jaeger, David A. & Klor, Esteban F. & Miaari, Sami H. & Paserman, Daniele, 2008. "The Struggle for Palestinian Hearts and Minds: Violence and Public Opinion in the Second Intifada," IZA Discussion Papers 3439, Institute for the Study of Labor (IZA).
  7. Claude Berrebi & Esteban F. Klor, 2008. "Are Voters Sensitive to Terrorism?: Direct Evidence from the Israeli Electorate," Working Papers, RAND Corporation Publications Department 477-1, RAND Corporation Publications Department.
  8. R Blundell & Steven Bond, . "Initial conditions and moment restrictions in dynamic panel data model," Economics Papers, Economics Group, Nuffield College, University of Oxford W14&104., Economics Group, Nuffield College, University of Oxford.
  9. Lapan, Harvey E. & Sandler, Todd, 1993. "Terrorism and signalling," European Journal of Political Economy, Elsevier, Elsevier, vol. 9(3), pages 383-397, August.
  10. Alan B. Krueger, 2007. "Introduction to What Makes a Terrorist: Economics and the Roots of Terrorism
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  11. Arellano, Manuel & Bover, Olympia, 1995. "Another look at the instrumental variable estimation of error-components models," Journal of Econometrics, Elsevier, Elsevier, vol. 68(1), pages 29-51, July.
  12. Efraim Benmelech & Claude Berrebi, 2007. "Human Capital and the Productivity of Suicide Bombers," Journal of Economic Perspectives, American Economic Association, American Economic Association, vol. 21(3), pages 223-238, Summer.
  13. Eli Berman & David Laitin, 2005. "Hard Targets: Theory and Evidence on Suicide Attacks," NBER Working Papers 11740, National Bureau of Economic Research, Inc.
  14. Kydd, Andrew & Walter, Barbara F., 2002. "Sabotaging the Peace: The Politics of Extremist Violence," International Organization, Cambridge University Press, Cambridge University Press, vol. 56(02), pages 263-296, March.
  15. Aragones, Enriqueta & Palfrey, Thomas R., 2002. "Mixed Equilibrium in a Downsian Model with a Favored Candidate," Journal of Economic Theory, Elsevier, Elsevier, vol. 103(1), pages 131-161, March.
  16. Berrebi Claude, 2007. "Evidence about the Link Between Education, Poverty and Terrorism among Palestinians," Peace Economics, Peace Science, and Public Policy, De Gruyter, De Gruyter, vol. 13(1), pages 1-38, December.
  17. Alan B. Krueger & Jitka Maleckova, 2003. "Education, Poverty and Terrorism: Is There a Causal Connection?," Journal of Economic Perspectives, American Economic Association, American Economic Association, vol. 17(4), pages 119-144, Fall.
  18. Efraim Benmelech & Claude Berrebi & Esteban F. Klor, 2010. "Economic Conditions and the Quality of Suicide Terrorism," NBER Working Papers 16320, National Bureau of Economic Research, Inc.
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