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Terrorism and Local Economic Development

Author

Listed:
  • Sundar Ponnusamy

    (DCentre for Health Economics, Monash University,)

  • Marco Faravelli

    (School of Economics, University of Queensland, Brisbane, Australia)

Abstract

Scientific We study the local economic effects of terror incidents at a sub-national level for a global set of developed and developing countries. Using night lights as a proxy for local economic activity, we identify that one additional fatality per attack results in a drop of 0.14 percent in economic development, on average. The effects are observed for up to a 15-kilometer radius from the incident location. The attacks targeted at business infrastructure and the police/military bases have the most detrimental effects. The group of countries from the Middle-Eastern and Northern African region, South Asia, and Sub-Saharan African regions suffer the most. Using individual-level data from four countries as a case study, we show that terrorism affects individual well-being and lowers the desire to have additional children among women. It is also evident that terrorism is detrimental to child health in the treated districts. Findings survive a battery of robustness tests.

Suggested Citation

  • Sundar Ponnusamy & Marco Faravelli, 2023. "Terrorism and Local Economic Development," Discussion Papers Series 664, School of Economics, University of Queensland, Australia.
    • Handle: RePEc:qld:uq2004:664
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    File URL: https://economics.uq.edu.au/files/47922/664.pdf
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    More about this item

    Keywords

    F52; H56; J13; O10;
    All these keywords.

    JEL classification:

    • F52 - International Economics - - International Relations, National Security, and International Political Economy - - - National Security; Economic Nationalism
    • H56 - Public Economics - - National Government Expenditures and Related Policies - - - National Security and War
    • J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth
    • O10 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - General

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