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The Corruption-Terrorism Nexus: A Panel Data Approach

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  • Nahil Boussiga
  • Malek Ghdamsi

Abstract

Corruption has been increasingly recognized as the major threat to economic development, political stability and peace. It is also acknowledged by the international community as the breeding ground for terrorism. This paper studies the relationship between corruption and terrorism in the long run. Previous studies examining the link between these two phenomena used only time series cointegration tests. In this paper, we consider a dataset for a panel of 123 developed and developing countries over the period 2003-2014. We use Pedroni¡¯s residual-based panel cointegration test and the error correction model-based panel cointegration test developed by Westerlund. In order to obtain more robust results, two different measures of corruption are utilized which are Corruption Perceptions Index (CPI) and Worldwide Control of Corruption Indicator (CC). The results of both tests reject the null hypothesis of no cointegration. we conclude that corruption and terrorism converge. Our findings corroborate results of previous studies.

Suggested Citation

  • Nahil Boussiga & Malek Ghdamsi, 2016. "The Corruption-Terrorism Nexus: A Panel Data Approach," International Journal of Economics and Finance, Canadian Center of Science and Education, vol. 8(11), pages 111-111, November.
    • Handle: RePEc:ibn:ijefaa:v:8:y:2016:i:11:p:111
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    References listed on IDEAS

    as
    1. Subhayu Bandyopadhyay & Todd Sandler & Javed Younas, 2011. "Foreign direct investment, aid, and terrorism: an analysis of developing countries," Working Papers 2011-004, Federal Reserve Bank of St. Louis.
    2. Kaufmann, Daniel, 2004. "Corruption, Governance and Security: Challenges for the Rich Countries and the World," MPRA Paper 8207, University Library of Munich, Germany.
    3. Alberto Abadie, 2006. "Poverty, Political Freedom, and the Roots of Terrorism," American Economic Review, American Economic Association, vol. 96(2), pages 50-56, May.
    4. Maria Santa-Gallego, Jaume Rosello-Nadal and Johan Fourie, 2016. "The effects of terrorism, crime and corruption on tourist arrivals," Working Papers 595, Economic Research Southern Africa.
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    Cited by:

    1. Marwa Elnahass & Mohamed Marie & Mohammed Elgammal, 2022. "Terrorist attacks and bank financial stability: evidence from MENA economies," Review of Quantitative Finance and Accounting, Springer, vol. 59(1), pages 383-427, July.

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    More about this item

    JEL classification:

    • R00 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General - - - General
    • Z0 - Other Special Topics - - General

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