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Military Aid, Direct Intervention and Counterterrorism

Author

Listed:
  • Maria D. C. Garcia-Alonso

    ()

  • Paul Levine

    ()

  • Ron Smith

    ()

Abstract

We present a model of transnational terrorism where two countries, home and foreign, face a terrorist threat based in the foreign country. The home country chooses how much to invest in defending itself or in reducing terrorist resources either indirectly by subsidising the foreign country or by directly by intervening itself. We use backward induction to solve a multiple stage game where the home country first commits to its policy decisions, then the foreign country chooses the effort it expends on reducing terrorist capability and finally, the terrorists decide their effort in attacking in the home or foreign country. In a numerical solution of the calibrated model, direct intervention only arises in equilibrium if foreign and home efforts are not close substitutes in the technology used to reduce the resources of the terrorist group. Greater relative military efficiency in the home country makes intervention more likely.

Suggested Citation

  • Maria D. C. Garcia-Alonso & Paul Levine & Ron Smith, 2015. "Military Aid, Direct Intervention and Counterterrorism," Studies in Economics 1501, School of Economics, University of Kent.
  • Handle: RePEc:ukc:ukcedp:1501
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    military conflict; strategic delegation; counterterrorism;

    JEL classification:

    • D58 - Microeconomics - - General Equilibrium and Disequilibrium - - - Computable and Other Applied General Equilibrium Models
    • D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances; Revolutions
    • H40 - Public Economics - - Publicly Provided Goods - - - General

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