Exploring the dynamics between terrorism and anti-terror spending: Theory and UK-evidence
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.
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Lapan, Harvey E. & Sandler, Todd, 1988.
"To Bargain or Not to Bargain: That is the Question,"
Staff General Research Papers Archive
10817, Iowa State University, Department of Economics.
- Lapan, Harvey E & Sandler, Todd, 1988. "To Bargain or Not to Bargain: That Is the Question," American Economic Review, American Economic Association, vol. 78(2), pages 16-21, May.
- Alberto Abadie & Javier Gardeazabal, 2003. "The Economic Costs of Conflict: A Case Study of the Basque Country," American Economic Review, American Economic Association, vol. 93(1), pages 113-132, March.
- Sims, Christopher A, 1980. "Macroeconomics and Reality," Econometrica, Econometric Society, vol. 48(1), pages 1-48, January.
- Bruno S. Frey & Simon Luechinger & Alois Stutzer, 2004.
"Calculating Tragedy: Assessing the Costs of Terrorism,"
CREMA Working Paper Series
2004-23, Center for Research in Economics, Management and the Arts (CREMA).
- 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.
- Bruno S. Frey & Simon Luechinger & Alois Stutzer, . "Calculating Tragedy: Assessing the Costs of Terrorism," IEW - Working Papers 205, Institute for Empirical Research in Economics - University of Zurich.
- Bruno S. Frey & Simon Luechinger & Alois Stutzer, 2004. "Calculating Tragedy: Assessing the Costs of Terrorism," CESifo Working Paper Series 1341, CESifo Group Munich.
- S. Brock Blomberg & Gregory D. Hess & Athanasios Orphanides, 2004.
"The Macroeconomic Consequences of Terrorism,"
CESifo Working Paper Series
1151, CESifo Group Munich.
- Alberto Abadie, 2004.
"Poverty, Political Freedom, and the Roots of Terrorism,"
NBER Working Papers
10859, National Bureau of Economic Research, Inc.
- Alberto Abadie, 2006. "Poverty, Political Freedom, and the Roots of Terrorism," American Economic Review, American Economic Association, vol. 96(2), pages 50-56, May.
- Abadie, Alberto, 2004. "Poverty, Political Freedom, and the Roots of Terrorism," Working Paper Series rwp04-043, Harvard University, John F. Kennedy School of Government.
- Abadie, Alberto & Gardeazabal, Javier, 2005.
"Terrorism and the World Economy,"
DFAEII Working Papers
2005-19, University of the Basque Country - Department of Foundations of Economic Analysis II.
- Dirk Rubbelke, 2005. "Differing motivations for terrorism," Defence and Peace Economics, Taylor & Francis Journals, vol. 16(1), pages 19-27.
- Faria Joao Ricardo, 2003. "Terror Cycles," Studies in Nonlinear Dynamics & Econometrics, De Gruyter, vol. 7(1), pages 1-11, April.
- Nitsch, Volker & Schumacher, Dieter, 2004. "Terrorism and international trade: an empirical investigation," European Journal of Political Economy, Elsevier, vol. 20(2), pages 423-433, June.
- Paan Jindapon & William S. Neilson, 2009. "The Impact Of Societal Risk Attitudes On Terrorism And Counterterrorism," Economics and Politics, Wiley Blackwell, vol. 21(3), pages 433-451, November.
- repec:diw:diwdiw:diwepb16 is not listed on IDEAS
- Eckstein, Zvi & Tsiddon, Daniel, 2004.
"Macroeconomic Consequences of Terror: Theory and the Case of Israel,"
CEPR Discussion Papers
4427, C.E.P.R. Discussion Papers.
- Eckstein, Zvi & Tsiddon, Daniel, 2004. "Macroeconomic consequences of terror: theory and the case of Israel," Journal of Monetary Economics, Elsevier, vol. 51(5), pages 971-1002, July.
- Feichtinger, G. & Hartl, R.F. & Kort, P.M. & Novak, A.J., 2001. "Terrorism control in the tourism industry," Other publications TiSEM 06ce575b-82fc-41e0-9141-9, Tilburg University, School of Economics and Management.
- Konstantinos Drakos & Nicholas Giannakopoulos, 2009. "An econometric analysis of counterterrorism effectiveness: the impact on life and property losses," Public Choice, Springer, vol. 139(1), pages 135-151, April.
- Walter Enders & Todd Sandler, 2005. "Transnational Terrorism 1968–2000: Thresholds, Persistence, and Forecasts," Southern Economic Journal, Southern Economic Association, vol. 71(3), pages 467-482, January.
- Enders, Walter & Sandler, Todd, 2000. "Is Transnational Terrorism Becoming More Threatening? A Time-Series Investigation," Staff General Research Papers Archive 1823, Iowa State University, Department of Economics.
- Siqueira, Kevin & Sandler, Todd, 2007. "Terrorist backlash, terrorism mitigation, and policy delegation," Journal of Public Economics, Elsevier, vol. 91(9), pages 1800-1815, September.
- Das, Satya P., 2008. "Some mechanisms of terror cycles," Journal of Economic Behavior & Organization, Elsevier, vol. 67(3-4), pages 644-656, September.
When requesting a correction, please mention this item's handle: RePEc:eee:jeborg:v:77:y:2011:i:2:p:189-202. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Shamier, Wendy)
If references are entirely missing, you can add them using this form.