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Terrorism and Cabinet Duration: An Empirical Analysis

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  • Martin Gassebner

    ()
    (Department of Management, Technology, and Economics, ETH Zurich)

  • Richard Jong-A-Pin

    ()
    (University of Groningen, Faculty of Economics and Business, The Netherlands)

  • Jochen O. Mierau

    ()
    (University of Groningen, Faculty of Economics and Business, The Netherlands)

Abstract

We examine the relationship between terrorism and cabinet duration. Our data set includes more than 2,400 cabinets in over 150 countries in the period 1968-2002. We find a small, but significant effect of terrorism on the probability of government failure. Furthermore, we find that the impact of terrorism depends on the type of attack and is larger in case of more severe attacks. Marginal effect calculations show that the impact of terror on cabinet duration is larger than the impact of economic variables such as economic growth, but less than the impact of a civil war or a government crisis. Our results suggest that cabinets in countries with high levels of terrorism are particularly vulnerable to terrorist attacks.

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Bibliographic Info

Paper provided by KOF Swiss Economic Institute, ETH Zurich in its series KOF Working papers with number 07-181.

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Length: 29 pages
Date of creation: Nov 2007
Date of revision:
Handle: RePEc:kof:wpskof:07-181

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Keywords: terror; political stability; cabinet dissolution;

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References

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  1. Carmignani, Fabrizio, 2002. "New Evidence on the Politics and Economics of Multiparty Cabinets Duration," Scottish Journal of Political Economy, Scottish Economic Society, vol. 49(3), pages 249-79, August.
  2. Torsten Persson & Guido Tabellini, 2006. "Democratic Capital: The Nexus of Political and Economic Change," NBER Working Papers 12175, National Bureau of Economic Research, Inc.
  3. Blomberg, S. Brock & Hess, Gregory D. & Orphanides, Athanasios, 2004. "The macroeconomic consequences of terrorism," Journal of Monetary Economics, Elsevier, vol. 51(5), pages 1007-1032, July.
  4. Kiefer, Nicholas M, 1988. "Economic Duration Data and Hazard Functions," Journal of Economic Literature, American Economic Association, vol. 26(2), pages 646-79, June.
  5. Bruno S. Frey & Simon Luechinger & Alois Stutzer, 2007. "Calculating Tragedy: Assessing The Costs Of Terrorism," Journal of Economic Surveys, Wiley Blackwell, vol. 21(1), pages 1-24, 02.
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  7. Beck, Thorsten & Clarke, George & Groff, Alberto & Keefer, Philip & Walsh, Patrick, 2000. "New tools and new tests in comparative political economy - the database of political institutions," Policy Research Working Paper Series 2283, The World Bank.
  8. Enders, Walter & Sandler, Todd & Parise, Gerald F, 1992. "An Econometric Analysis of the Impact of Terrorism on Tourism," Kyklos, Wiley Blackwell, vol. 45(4), pages 531-54.
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  10. Axel Dreher & Bernhard Herz & Volker Karb, 2006. "Is there a causal link between currency and debt crises?," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 11(4), pages 305-325.
  11. Tavares, Jose, 2004. "The open society assesses its enemies: shocks, disasters and terrorist attacks," Journal of Monetary Economics, Elsevier, vol. 51(5), pages 1039-1070, July.
  12. Bruno S. Frey & Simon Luechinger & Alois Stutzer, 2004. "Valuing Public Goods: The Life Satisfaction Approach," CREMA Working Paper Series 2004-11, Center for Research in Economics, Management and the Arts (CREMA).
  13. David Fielding, 2000. "Counting the Cost of the Intifada: Consumption,Saving and Political Instability in Israel," Discussion Papers in Economics 00/8, Department of Economics, University of Leicester.
  14. John Ferejohn, 1986. "Incumbent performance and electoral control," Public Choice, Springer, vol. 50(1), pages 5-25, January.
  15. Gassebner, Martin & Jong-A-Pin, Richard & Mierau, Jochen O., 2008. "Terrorism and electoral accountability: One strike, you're out!," Economics Letters, Elsevier, vol. 100(1), pages 126-129, July.
  16. Siqueira, Kevin & Sandler, Todd, 2007. "Terrorist backlash, terrorism mitigation, and policy delegation," Journal of Public Economics, Elsevier, vol. 91(9), pages 1800-1815, September.
  17. Hausman, Jerry A, 1978. "Specification Tests in Econometrics," Econometrica, Econometric Society, vol. 46(6), pages 1251-71, November.
  18. Charles Anderton & John Carter, 2005. "On Rational Choice Theory And The Study Of Terrorism," Defence and Peace Economics, Taylor & Francis Journals, vol. 16(4), pages 275-282.
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Citations

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Cited by:
  1. Axel Dreher & Nathan Jensen, 2009. "Country or Leader? Political Change and UN General Assembly Voting," KOF Working papers 09-217, KOF Swiss Economic Institute, ETH Zurich.
  2. Axel Dreher & Justina A.V. Fischer, 2008. "Decentralization as a disincentive for transnational terror? An empirical test," University of St. Gallen Department of Economics working paper series 2008 2008-01, Department of Economics, University of St. Gallen.
  3. Axel Dreher & Justina A. V. Fischer, 2010. "Government Decentralization As A Disincentive For Transnational Terror? An Empirical Analysis," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 51(4), pages 981-1002, November.
  4. Kis-Katos, Krisztina & Liebert, Helge & Schulze, Günther G., 2012. "On the Heterogeneity of Terror," IZA Discussion Papers 6596, Institute for the Study of Labor (IZA).
  5. Javier Gardeazabal, 2011. "Terrorism, Economic Downturns and Elections," EUSECON Policy Briefing 4, DIW Berlin, German Institute for Economic Research.
  6. Martin Gassebner & Simon Luechinger, 2011. "Lock, Stock, and Barrel: A Comprehensive Assessment of the Determinants of Terror," CESifo Working Paper Series 3550, CESifo Group Munich.
  7. Axel Dreher & Justina Fischer, 2008. "Decentralization as a disincentive for transnational terror? System stability versus government efficiency: an empirical test," TWI Research Paper Series 41, Thurgauer Wirtschaftsinstitut, Universität Konstanz.
  8. Axel Dreher & Andreas Fuchs, 2011. "Does terror increase aid?," Courant Research Centre: Poverty, Equity and Growth - Discussion Papers 86, Courant Research Centre PEG.

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