IDEAS home Printed from https://ideas.repec.org/p/eiq/eileqs/112.html
   My bibliography  Save this paper

Thirty Years of Conflict and Economic Growth in Turkey: A Synthetic Control Approach

Author

Listed:
  • Fırat Bilgel
  • Burhan Can Karahasan

Abstract

This study seeks to estimate the economic effects of PKK terrorism in Turkey in a causal framework. We create a synthetic control group that reproduces the Turkish real per capita Gross Domestic Product (GDP) before PKK terrorism emerged in the second half of the 1980s. We compare the GDP of the synthetic Turkey without terrorism to the actual Turkey with terrorism for the period 1955-2008. Covering the period of 1988-2008, we find that the Turkish per capita GDP would have been higher by an average of about $1,585 per year had it not been exposed to PKK terrorism. This translates into an average of 13.8 percent higher per capita GDP or a 0.62 percentage points higher annual growth over a period of 21 years. Our estimate is robust to country exclusion, sparse controls, various non-outcome characteristics as predictors of GDP, alternative specifications of the in-space placebo experiments and to other potentially confounding interventions to the sample units in the pre-terrorism period.

Suggested Citation

  • Fırat Bilgel & Burhan Can Karahasan, 2016. "Thirty Years of Conflict and Economic Growth in Turkey: A Synthetic Control Approach," LEQS – LSE 'Europe in Question' Discussion Paper Series 112, European Institute, LSE.
  • Handle: RePEc:eiq:eileqs:112
    as

    Download full text from publisher

    File URL: http://www.lse.ac.uk/europeanInstitute/LEQS/LEQSPaper112.pdf
    Download Restriction: no

    References listed on IDEAS

    as
    1. Ferhan Gezici & Geoffrey J. D. Hewings, 2007. "Spatial Analysis of Regional Inequalities in Turkey," European Planning Studies, Taylor & Francis Journals, vol. 15(3), pages 383-403, April.
    2. Fırat Bilgel & Burhan Can Karahasan, 2017. "The Economic Costs of Separatist Terrorism in Turkey," Journal of Conflict Resolution, Peace Science Society (International), vol. 61(2), pages 457-479, February.
    3. Tim Krieger & Daniel Meierrieks, 2011. "What causes terrorism?," Public Choice, Springer, vol. 147(1), pages 3-27, April.
    4. Gul, Tayyeba Gul & Hussain, Anwar Hussain & Bangash, Shafiqullah Bangash & Khattak, Sanam Waghma Khattak, 2010. "Impact of Terrorism on Financial Markets of Pakistan (2006-2008)," MPRA Paper 41990, University Library of Munich, Germany.
    5. 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.
    6. Andreas Billmeier & Tommaso Nannicini, 2013. "Assessing Economic Liberalization Episodes: A Synthetic Control Approach," The Review of Economics and Statistics, MIT Press, vol. 95(3), pages 983-1001, July.
    7. Mete Feridun & Selami Sezgin, 2008. "Regional Underdevelopment And Terrorism: The Case Of South Eastern Turkey," Defence and Peace Economics, Taylor & Francis Journals, vol. 19(3), pages 225-233.
    8. Dorsett, Richard, 2013. "The effect of the Troubles on GDP in Northern Ireland," European Journal of Political Economy, Elsevier, vol. 29(C), pages 119-133.
    9. Alberto Colino, 2013. "Conflict Resolution Processes, Uncertainty And Investment Dynamics: Evidence For The Basque Country," Defence and Peace Economics, Taylor & Francis Journals, vol. 24(3), pages 229-245, June.
    10. Mete Feridun, 2011. "Impact of terrorism on tourism in Turkey: empirical evidence from Turkey," Applied Economics, Taylor & Francis Journals, vol. 43(24), pages 3349-3354.
    11. Andrés Castañeda & Juan F. Vargas, 2012. "Sovereign risk and armed conflict: an event-study for colombia," Defence and Peace Economics, Taylor & Francis Journals, vol. 23(2), pages 185-201, April.
    12. Iacus, Stefano M. & King, Gary & Porro, Giuseppe, 2011. "Multivariate Matching Methods That Are Monotonic Imbalance Bounding," Journal of the American Statistical Association, American Statistical Association, vol. 106(493), pages 345-361.
    13. 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.
    14. Horiuchi, Yusaku & Mayerson, Asher, 2015. "The Opportunity Cost of Conflict: Statistically Comparing Israel and Synthetic Israel," Political Science Research and Methods, Cambridge University Press, vol. 3(3), pages 609-618, September.
    15. Christian Almer & Roland Hodler, 2015. "The Economic Effects of Political Violence: Evidence from the Genocide in Rwanda," Department of Economics Working Papers 37/14, University of Bath, Department of Economics.
    16. Benedicta Marzinotto, 2016. "Income Inequality and Macroeconomic Imbalances under EMU," LEQS – LSE 'Europe in Question' Discussion Paper Series 110, European Institute, LSE.
    17. Saurabh Singhal & Rahul Nilakantan, 2012. "Naxalite Insurgency and the Economic Benefits of a Unique Robust Security Response," HiCN Working Papers 127, Households in Conflict Network.
    18. Sultan Mehmood, 2014. "Terrorism and the macroeconomy: Evidence from Pakistan," Defence and Peace Economics, Taylor & Francis Journals, vol. 25(5), pages 509-534, October.
    19. Alberto Colino, 2012. "Conflict resolution processes, uncertainty and labour demand," Journal of Peace Research, Peace Research Institute Oslo, vol. 49(5), pages 661-670, September.
    20. Bahar Araz-Takay & K. Peren Arin & Tolga Omay, 2009. "The Endogenous And Non-Linear Relationship Between Terrorism And Economic Performance: Turkish Evidence," Defence and Peace Economics, Taylor & Francis Journals, vol. 20(1), pages 1-10.
    21. Iacus, Stefano M. & King, Gary & Porro, Giuseppe, 2012. "Causal Inference without Balance Checking: Coarsened Exact Matching," Political Analysis, Cambridge University Press, vol. 20(1), pages 1-24, January.
    22. Abadie, Alberto & Diamond, Alexis & Hainmueller, Jens, 2010. "Synthetic Control Methods for Comparative Case Studies: Estimating the Effect of California’s Tobacco Control Program," Journal of the American Statistical Association, American Statistical Association, vol. 105(490), pages 493-505.
    23. Kaul, Ashok & Klößner, Stefan & Pfeifer, Gregor & Schieler, Manuel, 2015. "Synthetic Control Methods: Never Use All Pre-Intervention Outcomes Together With Covariates," MPRA Paper 83790, University Library of Munich, Germany.
    24. Sascha O. Becker & Andrea Ichino, 2002. "Estimation of average treatment effects based on propensity scores," Stata Journal, StataCorp LP, vol. 2(4), pages 358-377, November.
    25. Aysegul Kayaoglu, 2016. "Socioeconomic impact of conflict: state of emergency ruling in Turkey," Defence and Peace Economics, Taylor & Francis Journals, vol. 27(1), pages 117-136, February.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Yilmaz Bayar & Marius Dan Gavriletea, 2018. "Peace, terrorism and economic growth in Middle East and North African countries," Quality & Quantity: International Journal of Methodology, Springer, vol. 52(5), pages 2373-2392, September.
    2. Tahar Lassoued & Arafet Hamida & Zouhaier Hadhek, 2018. "Terrorism and Economic Growth," International Journal of Economics and Financial Issues, Econjournals, vol. 8(1), pages 175-178.

    More about this item

    Keywords

    separatist terrorism; synthetic control; Turkey; economic development; causal inference;

    JEL classification:

    • C15 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Statistical Simulation Methods: General
    • D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances; Revolutions
    • P59 - Economic Systems - - Comparative Economic Systems - - - Other

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eiq:eileqs:112. 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: (Katjana Gattermann). General contact details of provider: http://edirc.repec.org/data/eilseuk.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.