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Decentralization as a disincentive for transnational terror? System stability versus government efficiency: an empirical test

  • Axel Dreher
  • Justina Fischer

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 robustly reduces the number of terror events in a country, while political decentralization has no impact. The effects of decentralization do not transmit through government efficiency and effectiveness, in line with the system stability hypothesis of Frey and Luechinger (2004).

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Paper provided by Thurgauer Wirtschaftsinstitut, Universit�t Konstanz in its series TWI Research Paper Series with number 41.

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Date of creation: 2008
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Handle: RePEc:twi:respas:0041
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    • 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.
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