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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

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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    References listed on IDEAS

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    Citations

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    Cited by:

    1. 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.
    2. Freytag, Andreas & Krüger, Jens J. & Meierrieks, Daniel & Schneider, Friedrich, 2011. "The origins of terrorism: Cross-country estimates of socio-economic determinants of terrorism," European Journal of Political Economy, Elsevier, vol. 27(S1), pages 5-16.
    3. repec:spr:scient:v:101:y:2014:i:1:d:10.1007_s11192-014-1378-4 is not listed on IDEAS
    4. 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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