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Exploring the dynamics between terrorism and anti-terror spending: Theory and UK-evidence

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  • Peren Arin, K.
  • Lorz, Oliver
  • Reich, Otto F.M.
  • Spagnolo, Nicola

Abstract

Recent years have seen governments restricting civic freedoms and legislating significant increases in spending to combat terrorist activities. In this paper, we investigate the relationship between anti-terror spending and terrorism. In line with previous findings in the empirical literature on terrorist activity, our game-theoretic model of the interaction between a benevolent government and a terrorist organization is suggestive of a non-linear relation between terrorism and counter-terrorism spending. Using UK data, our empirical Markov-switching implementation provides evidence in favor of this approach. The empirical results also show that the probability of transiting into a state with high terror is smaller if defense spending is high.

Suggested Citation

  • Peren Arin, K. & Lorz, Oliver & Reich, Otto F.M. & Spagnolo, Nicola, 2011. "Exploring the dynamics between terrorism and anti-terror spending: Theory and UK-evidence," Journal of Economic Behavior & Organization, Elsevier, vol. 77(2), pages 189-202, February.
  • Handle: RePEc:eee:jeborg:v:77:y:2011:i:2:p:189-202
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    Cited by:

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    2. Jaspersen, Johannes G. & Montibeller, Gilberto, 2020. "On the learning patterns and adaptive behavior of terrorist organizations," European Journal of Operational Research, Elsevier, vol. 282(1), pages 221-234.
    3. McBride, Michael & Hewitt, David, 2013. "The enemy you can’t see: An investigation of the disruption of dark networks," Journal of Economic Behavior & Organization, Elsevier, vol. 93(C), pages 32-50.
    4. Edoardo Magnone, 2014. "The extreme case of terrorism: a scientometric analysis," Scientometrics, Springer;Akadémiai Kiadó, vol. 101(1), pages 179-201, October.
    5. Friedrich Schneider & Tilman Brück & Daniel Meierrieks, 2015. "The Economics Of Counterterrorism: A Survey," Journal of Economic Surveys, Wiley Blackwell, vol. 29(1), pages 131-157, February.

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