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Decentralization as a Disincentive for Transnational Terror?

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  • Axel Dreher
  • Justina A.V. Fischer

Abstract

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. Taking account of the potential simultaneity between terror and decentralization, our results show that expenditure decentralization robustly reduces the number of terror events in a country, while political decentralization has no impact.

Suggested Citation

  • Axel Dreher & Justina A.V. Fischer, 2008. "Decentralization as a Disincentive for Transnational Terror?," KOF Working papers 08-185, KOF Swiss Economic Institute, ETH Zurich.
  • Handle: RePEc:kof:wpskof:08-185
    DOI: 10.3929/ethz-a-005510833
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    References listed on IDEAS

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    1. Alberto Abadie, 2006. "Poverty, Political Freedom, and the Roots of Terrorism," American Economic Review, American Economic Association, vol. 96(2), pages 50-56, May.
    2. Enders, Walter & Sandler, Todd, 1998. "Transnational Terrorism in the Post-Cold War Era," ISU General Staff Papers 199804010800001308, Iowa State University, Department of Economics.
    3. Jan Schnellenbach, 2006. "Appeasing nihilists? Some economic thoughts on reducing terrorist activity," Public Choice, Springer, vol. 129(3), pages 301-313, December.
    4. Bruno S. Frey & Simon Luechinger, "undated". "How to Fight Terrorism: Alternatives to Deterrence," IEW - Working Papers 137, Institute for Empirical Research in Economics - University of Zurich.
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    Cited by:

    1. Friedrich Schneider & Tilman Brück & Daniel Meierrieks, 2010. "The Economics of Terrorism and Counter-Terrorism: A Survey (Part I)," Discussion Papers of DIW Berlin 1049, DIW Berlin, German Institute for Economic Research.
    2. Campos, Nauro F. & Gassebner, Martin, 2009. "International Terrorism, Political Instability and the Escalation Effect," IZA Discussion Papers 4061, Institute of Labor Economics (IZA).
    3. Tim Krieger & Daniel Meierrieks, 2011. "What causes terrorism?," Public Choice, Springer, vol. 147(1), pages 3-27, April.

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