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Security, Trade, and Political Violence

Author

Listed:
  • Francesco AMODIO
  • Leonardo BACCINI
  • Michèle DI MAIO

Abstract

This paper studies the effect of security-motivated trade restrictions on economic activity and political violence. We exploit the 2008 restrictions imposed by Israel on imports of selected goods to the West Bank as a quasi-experiment. We show that after 2008 (i) output and wages decrease differentially in manufacturing sectors that use restricted materials more intensively as production inputs, (ii) wages decrease in localities where employment is more concentrated in these sectors, and (iii) episodes of political violence are more likely to occur in these localities. This mechanism accounts for 16% of violent events that occurred in the West Bank from 2008 to 2012.

Suggested Citation

  • Francesco AMODIO & Leonardo BACCINI & Michèle DI MAIO, 2018. "Security, Trade, and Political Violence," Cahiers de recherche 20-2018, Centre interuniversitaire de recherche en économie quantitative, CIREQ.
    • Handle: RePEc:mtl:montec:20-2018
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    Cited by:

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    2. Amr Ragab & Ayhab F. Saad, 2023. "The effects of a negative economic shock on male marriage in the West Bank," Review of Economics of the Household, Springer, vol. 21(3), pages 789-814, September.
    3. Kevin Donovan & Jianyu Lu & Todd Schoellman, 2018. "Labor Market Flows and Development," 2018 Meeting Papers 976, Society for Economic Dynamics.
    4. Di Maio, Michele & Leone Sciabolazza, Valerio, 2023. "Conflict exposure and labour market outcomes: Evidence from longitudinal data for the Gaza Strip," Labour Economics, Elsevier, vol. 85(C).
    5. Brancati, Emanuele & Di Maio, Michele & Gatti, Roberta V. & Islam, Asif M, 2024. "Under Pressure: Global Evidence on Conflict and Firms," Policy Research Working Paper Series 10898, The World Bank.
    6. Del Prete, Davide & Di Maio, Michele & Rahman, Aminur, 2023. "Firms amid conflict: Performance, production inputs, and market competition," Journal of Development Economics, Elsevier, vol. 164(C).
    7. Dominic Rohner, 2022. "Conflict, Civil Wars and Human Development," Cahiers de Recherches Economiques du Département d'économie 22.08, Université de Lausanne, Faculté des HEC, Département d’économie.
    8. Vincenzo Bove & Jessica Di Salvatore & Roberto Nisticò, 2023. "Economic Sanctions and Trade Flows in the Neighborhood," Journal of Law and Economics, University of Chicago Press, vol. 66(4), pages 671-697.
    9. Nicola Limodio, 2022. "Terrorism Financing, Recruitment, and Attacks," Econometrica, Econometric Society, vol. 90(4), pages 1711-1742, July.
    10. Michele Di Maio & Valerio Leone Sciabolazza, 2021. "Conflict exposure and health: Evidence from the Gaza Strip," Health Economics, John Wiley & Sons, Ltd., vol. 30(9), pages 2287-2295, September.
    11. Artem Kochnev, 2019. "Dying Light: War and Trade of the Separatist-Controlled Areas of Ukraine," wiiw Working Papers 161, The Vienna Institute for International Economic Studies, wiiw.
    12. Di Maio, Michele & Leone Sciabolazza, Valerio & Molini, Vasco, 2023. "Migration in Libya: A spatial network analysis," World Development, Elsevier, vol. 163(C).

    More about this item

    Keywords

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    JEL classification:

    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • F51 - International Economics - - International Relations, National Security, and International Political Economy - - - International Conflicts; Negotiations; Sanctions
    • N45 - Economic History - - Government, War, Law, International Relations, and Regulation - - - Asia including Middle East
    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development

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