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Government Decentralization as a Disincentive for Transnational Terror? An Empirical Analysis

  • Dreher, Axel


    (Heidelberg University)

  • Fischer, Justina A.V.


    (University of Mannheim)

Using panel data for a maximum of 109 countries over the years 1976-2000, we empirically analyze the impact of decentralization on the occurrence of transnational terror. Our results show that expenditure decentralization reduces the number of transnational terror events in a country, while political decentralization has no impact. These results are robust to the choice of control variables and method of estimation.

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Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 4259.

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Length: 42 pages
Date of creation: Jun 2009
Date of revision:
Publication status: published in: International Economic Review, 2010, 51 (4), 981 - 1002
Handle: RePEc:iza:izadps:dp4259
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  1. Frey, Bruno S. & Luechinger, Simon, 2004. "Decentralization as a disincentive for terror," European Journal of Political Economy, Elsevier, vol. 20(2), pages 509-515, June.
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  7. Charles M. Tiebout, 1961. "An Economic Theory of Fiscal Decentralization," NBER Chapters, in: Public Finances: Needs, Sources, and Utilization, pages 79-96 National Bureau of Economic Research, Inc.
  8. Strumpf, Koleman S, 2002. " Does Government Decentralization Increase Policy Innovation?," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 4(2), pages 207-41.
  9. Bruno Frey & Simon Luechinger & Alois Stutzer, 2009. "The life satisfaction approach to valuing public goods: The case of terrorism," Public Choice, Springer, vol. 138(3), pages 317-345, March.
  10. Alan B. Krueger & Jitka Maleckova, 2003. "Education, Poverty and Terrorism: Is There a Causal Connection?," Journal of Economic Perspectives, American Economic Association, vol. 17(4), pages 119-144, Fall.
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  12. Enders, Walter & Sandler, Todd, 1999. "Transnational Terrorism in the Post-Cold War Era," Staff General Research Papers 1532, Iowa State University, Department of Economics.
  13. Bruno S. Frey & Simon Luechinger & Alois Stutzer, 2004. "Calculating Tragedy: Assessing the Costs of Terrorism," CESifo Working Paper Series 1341, CESifo Group Munich.
  14. Dreher, Axel & Gassebner, Martin, 2008. "Does political proximity to the U.S. cause terror?," Economics Letters, Elsevier, vol. 99(1), pages 27-29, April.
  15. Fisman, Raymond & Gatti, Roberta, 2002. "Decentralization and corruption: evidence across countries," Journal of Public Economics, Elsevier, vol. 83(3), pages 325-345, March.
  16. Ebel, Robert D. & Yilmaz, Serdar, 2002. "On the measurement and impact of fiscal decentralization," Policy Research Working Paper Series 2809, The World Bank.
  17. Martin Gassebner & Richard Jong‐A‐Pin & Jochen O. Mierau, 2011. "Terrorism And Cabinet Duration," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 52(4), pages 1253-1270, November.
  18. Beck, Thorsten & Clarke, George & Groff, Alberto & Keefer, Philip & Walsh, Patrick, 2000. "New tools and new tests in comparative political economy - the database of political institutions," Policy Research Working Paper Series 2283, The World Bank.
  19. Gary S. Becker, 1974. "Crime and Punishment: An Economic Approach," NBER Chapters, in: Essays in the Economics of Crime and Punishment, pages 1-54 National Bureau of Economic Research, Inc.
  20. Bjørnskov, Christian & Drehe, Axel & Fischer, Justina A.V., 2008. "On decentralization and life satisfaction," Economics Letters, Elsevier, vol. 99(1), pages 147-151, April.
  21. Roger Congleton, 2006. "The story of Katrina: New Orleans and the political economy of catastrophe," Public Choice, Springer, vol. 127(1), pages 5-30, April.
  22. Tim Krieger & Daniel Meierrieks, 2008. "What causes terrorism?," Working Papers CIE 12, University of Paderborn, CIE Center for International Economics.
  23. Sandler, Todd & Enders, Walter, 2004. "An economic perspective on transnational terrorism," European Journal of Political Economy, Elsevier, vol. 20(2), pages 301-316, June.
  24. Justina A.V. Fischer, 2005. "Do Institutions of Direct Democracy Tame the Leviathan? Swiss Evidence on the Structure of Expenditure for Public Education," CESifo Working Paper Series 1628, CESifo Group Munich.
  25. Bruno S. Frey & Simon Luechinger, 2005. "Measuring terrorism," Chapters, in: Law and the State, chapter 6 Edward Elgar.
  26. Bruno S. Frey & Simon Luechinger, . "How to Fight Terrorism: Alternatives to Deterrence," IEW - Working Papers 137, Institute for Empirical Research in Economics - University of Zurich.
  27. John Luke Gallup & Jeffrey D. Sachs & Andrew Mellinger, 1999. "Geography and Economic Development," CID Working Papers 1, Center for International Development at Harvard University.
  28. Axel Dreher & Jan-Egbert Sturm, 2006. "Do IMF and World Bank Influence Voting in the UN General Assembly?," CESifo Working Paper Series 1724, CESifo Group Munich.
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