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Remittances and the Financing of Terrorism In Sub-Saharan Africa: 1974 - 2006

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  • Elu Juliet U.

    () (Morehouse College)

  • Price Gregory N.

    () (Morehouse College)

Abstract

Remittances have been recognized as an important determinant of economic growth for Sub-Saharan African economies as they can finance other determinants that constitute drivers of growth. To the extent that remittances finance terrorism, they can also inhibit economic growth as terrorism can constrain important drivers of growth such as investment and consumption expenditures. In this paper, we appeal to a theory of rational terrorism and consider whether remittances to Sub-Saharan Africa finance terrorism. We estimate the parameters of a static and dynamic terrorism incident supply function with maximum likelihood and Generalized Estimating Equation count data estimators for Sub-Saharan Africa between 1974 and 2006. Our parameter estimates suggest that for Sub-Saharan Africa, remittances are a source of finance for terrorism. We find that approximately one terrorism incident is financed in Sub-Saharan Africa for remittance inflows that range between approximately one quarter of a million dollars and one million dollars.

Suggested Citation

  • Elu Juliet U. & Price Gregory N., 2012. "Remittances and the Financing of Terrorism In Sub-Saharan Africa: 1974 - 2006," Peace Economics, Peace Science, and Public Policy, De Gruyter, vol. 18(1), pages 1-42, July.
    • Handle: RePEc:bpj:pepspp:v:18:y:2012:i:1:n:5
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    References listed on IDEAS

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    2. Hinkkainen Kaisa, 2013. "Homegrown Terrorism: The Known Unknown," Peace Economics, Peace Science, and Public Policy, De Gruyter, vol. 19(2), pages 157-182, August.
    3. Njangang, Henri, 2018. "Does the size of the informal economy impede the impact of remittances on economic growth? Evidence from Sub-Saharan African countries," MPRA Paper 90187, University Library of Munich, Germany.
    4. Michael Batu, 2019. "Can remittances buy peace?," Economics of Transition and Institutional Change, John Wiley & Sons, vol. 27(4), pages 891-913, October.
    5. Njangang, Henri & Nembot Ndeffo, Luc & Noubissi Domguia, Edmond & Fosto Koyeu, Prevost, 2018. "The long-run and short-run effects of foreign direct investment, foreign aid and remittances on economic growth in African countries," MPRA Paper 89747, University Library of Munich, Germany.

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