Fighting Terrorism: Empirics on Policy Harmonization

Asongu, Simplice and Nwachukwu, Jacinta (2015): Fighting Terrorism: Empirics on Policy Harmonization.

Abstract

This paper models the feasibility of common policy initiatives against global terrorism, as well as timelines for their enforcement. The empirical evidence is based on 78 developing countries for the period 1984-2008. Employed terrorism dynamics are domestic, transnational, unclear and total terrorism. Absolute (or unconditional) and conditional catch-ups are modelled using Generalised Methods of Moments. We establish consistently that, the rate of catch-up is higher in domestic terrorism relative to transnational terrorism. The time to full catch-up required for the implementation of common policies without distinction of nationality is found to be in a horizon of 13.34-19.92 years for domestic terrorism and 24.67-27.88 years for transnational terrorism. Hence, from a projection date of 2009, in spite of decreasing cross-country differences in terrorists’ attacks, there is still a long way to go before feasible common policy initiatives can be fully implemented without distinction of nationality. The paper is original by its contribution to the empirics of conflict resolution through decreasing cross-country differences in terrorism tendencies. Policy implications are discussed.

• Item Type: MPRA Paper
• Language: English
• Keywords: Terrorism; Common policies; Development
• Subjects: C - Mathematical and Quantitative Methods > C5 - Econometric Modeling > C52 - Model Evaluation, Validation, and Selection; D - Microeconomics > D7 - Analysis of Collective Decision-Making > D74 - Conflict ; Conflict Resolution ; Alliances ; Revolutions; F - International Economics > F4 - Macroeconomic Aspects of International Trade and Finance > F42 - International Policy Coordination and Transmission; K - Law and Economics > K4 - Legal Procedure, the Legal System, and Illegal Behavior > K42 - Illegal Behavior and the Enforcement of Law; O - Economic Development, Innovation, Technological Change, and Growth > O3 - Innovation ; Research and Development ; Technological Change ; Intellectual Property Rights > O38 - Government Policy

References

Abadie, A., & Gardeazabal, J., (2008), “Terrorism and the world economy”, European Economic Review, 52(1), pp.1-27.

Aisen, A., & Veiga, F. J., (2006). “Does Political Instability Lead to Higher Inflation? A Panel Data Analysis”, Journal of Money, Credit, and Banking, 38 (5), pp. 1379-89.

Akinwale, A. K., (2010). “Integrating the traditional and the modern conflict management strategies in Nigeria”, Department of Sociology, Faculty of Social Sciences, University of Ibadan, Nigeria.

Andrés, A. R., & Asongu, S. A., (2013). “Global dynamic timelines for IPRs harmonization against software piracy”, Economics Bulletin, 33(1), pp. 874-880.

Apergis, N., Christou, C., & Miller, S. M., (2010). “Country and Industry Convergence in Equity Markets: International Evidence from Club Convergence and Clustering”, Department of Banking and Financial Management, University of Piraeus, Greece.

Arellano, M., & Bond, S., (1991). “Some tests of specification for panel data: Monte Carlo evidence and an application to employment equations”. The Review of Economic Studies, 58, pp. 277-297.

Arellano, M., & Bover, O., (1995). “Another look at the instrumental variable estimation of error-components models”, Journal of Econometrics, 68, pp. 29-52.

Arnet, G., (2014). “Global peace index 2014: every country ranked”, The Gaurdian, http://www.theguardian.com/news/datablog/2014/jun/18/global-peace-index-2014-every-country-ranked (Accessed: 17/06/2015).

Asongu, S. A., (2013a). “Harmonizing IPRs on Software Piracy: Empirics of Trajectories in Africa”, Journal of Business Ethics, 118(3), pp. 45-60.

Asongu, S. A., (2013b). “African Stock Market Performance Dynamics: A Multidimensional Convergence Assessment”, Journal of African Business, 14(3), pp. 186-201.

Asongu, S. A., (2014a). “Fighting African Capital Flight: Empirics on Benchmarking Policy Harmonization”, European Journal of Comparative Economics, 11(1), pp. 93-122.

Asongu, S. A., (2014b). “African Development: Beyond Income Convergence”, South African Journal of Economics, 82(3), pp. 334-353.

Asongu, S. A., & Kodila-Tedika, O., (2016). “Fighting African Conflicts and Crime: Which Governance Tools Matter?”, International Journal of Social Economics: Forthcoming.

Asongu, S. A., & Nwachukwu, J. C., (2016). “The Role of Lifelong Learning in Political Stability and Non-violence: Evidence from Africa”, Journal of Economic Studies: Forthcoming.

Asongu, S. A., & Nwachukwu, J. C., (2015). “Revolution empirics: predicting the Arab Spring”, Empirical Economics: Revised and Resubmitted.

Asongu, S., Efobi, U., & Beecroft, I., “2015). “FDI, Aid, Terrorism: Conditional Threshold Evidence from Developing Countries”, African Governance and Development Institute Working Paper No. 15/019.

Bandyopadhyay, S., Sandler, T., &Younas, J., (2014). “Foreign direct investment, aid, and terrorism”, Oxford Economic Papers, 66(1), pp. 25-50.

Bandyopadhyay, S., & Younas, J., (2014), “Terrorism: A Threat to Foreign Direct Investment”, Doing Business Abroad Policy Report https://www.stlouisfed.org/~/media/Files/PDFs/publications/pub_assets/pdf/re/2014/d/terrorism.pdf (Accessed: 29/04/2015).

Barro, R., (1991). “Economic Growth in a Cross Section of Countries”. Quarterly Journal of Economics 196 (2/May): 407–443.

Barro, R. J., & Sala-i-Martin, X., (1992). “Convergence”, Journal of Political Economy, 100, pp. 223-251.

Barro, R. J., & Sala-i-Martin, X., (1995). Economic Growth. The MIT Press, Cambridge, MA.

Baumol, W. J., (1986). “Productivity, growth, convergence and welfare: what the long run data show”, American Economic Review, 76, pp. 1072-1085.

Beets, S. D., (2005). “Understanding the Demand-Side Issues of International Corruption.” Journal of Business Ethics, 57 (1), pp. 65-81.

Bell, S. R., Clay, K. C., Murdie, A., & Piazza, J., (2014). “Opening Yourself Up: The Role of External and Internal Transparency in Terrorism Attacks”, Political Research Quarterly: doi:10.1177/1065912914527798.

Black, D., (1990). The elementary forms of conflict management. New York, Plenum Press.

Blinder, A. S., (1987). “Credit Rationing and Effective Supply Failures”, The Economic Journal, 97, pp. 327-352.

Blundell, R., & Bond, S., (1998). “Initial conditions and moment restrictions in dynamic panel data models”, Journal of Econometrics, 87(1), pp. 115-143.

Bond, S., Hoeffler, A., & Tample, J., (2001). “GMM Estimation of Empirical Growth Models”, University of Oxford.

Borg, M. J., (1992). “Conflict management in the modern world-system”. Sociological Forum, 7(2), pp. 261-282.

Brockhoff, S., Kieger, T., & Meierrieks, D., (2014). “Great Expectations and Hard Times - The (Nontrivial) Impact of Education on Domestic Terrorism”, Journal of Conflict Resolution: doi: 10.1177/0022002713520589.

Bruno, G., De Bonis, R., & Silvestrini, A., (2012). “Do financial systems converge? New evidence from financial assets in OECD countries”. Journal of Comparative Economics; 40(1), pp. 141-155.

Choi, S-W., (2015). “Economic growth and terrorism: domestic, international, and suicide”, Oxford Economic Papers, 67(1), pp. 157-181.

Choi, S-W., (2010). “Fighting Terrorism through the Rule of Law?”, The Journal of Conflict Resolution, 54(6), pp. 940-966.

Costantini, M., & Lupi, C., (2005). “Stochastic Convergence among European Economies”. Economics Bulletin, 3(38), pp.1-17.

Costa, A., Hermandez, M., & Sebastian-Gallés, N., (2008). “Bilingualism aids conflict resolution: Evidence from the ANT task”, Cognition, 106 (1), pp. 59-86.

Efobi, U., Asongu, S., & Beecroft, I., (2015). “Foreign Direct Investment, Aid and Terrorism: Empirical Insight Conditioned on Corruption Control”, African Governance and Development Institute Working Paper No. 15/007, Yaoundé.

Eubank, N., (2012). “Taxation, Political Accountability and Foreign Aid: Lessons from Somaliland”, Journal of Development Studies, 48(4), pp. 465-480.

Feridun, M., & Shahbaz, M., (2010). “Fighting Terrorism: Are Military Measures Effective? Empirical Evidence from Turkey”, Defence & Peace Economics, 21(2), pp. 193-205.

Fung, M. K., (2009). “Financial development and economic growth: convergence or divergence?”. Journal of International Money and Finance, 28, pp.56-67.

Gaibulloev, K., & Sandler, T., (2009). “The impact of terrorism and conflicts on growth in Asia”, Economics and Politics, 21(3), pp. 359-383.

Gardner, K. L., (2007). “Fighting Terrorism the FATF Way”. Global Governance: A Review of Multilateralism and International Organisation, 13(3), pp. 325-345.

GTI (2014). “Global Terrorism Index: Measuring and Understanding the Impact of Terrorism”, Institute for Economics and Peace, pp. 2-90. http://www.visionofhumanity.org/sites/default/files/Global%20Terrorism%20Index%20Report%202014_0.pdf (Accessed: 28/04/2015).

Heyneman, S. P., (2002). “Defining the Influence of Education on Social Cohesion”, International Journal of Educational Policy, Research and Practice, 3(4), pp. 73-97.

Heyneman, S. P., (2008a). “Education, social cohesion and ideology. In Right to Education: Policies and Perspectives,edited by Emin Karip, 89-104. Ankara: Turkish Education Association.

Heyneman, S. P., (2008b). “Buying your way into Heaven: The corruption of education systems in global perspective.”, Perspectives on Global Issues, 2 (1), pp. 1-8.

Hoffman, A. M., Shelton, C., & Cleven, E., (2013). “Press Freedom, Publicity, and the Cross-National Incidence of Transnational Terrorism”, Political Research Quarterly, 66 (4), pp. 896-909.

Humphreys, M., (2005). “Natural Resources, Conflict, and Conflict Resolution. Uncovering the Mechanisms”, Journal of Conflict Resolution, 49 (4), pp. 508-537.

International Country Risk Guide. (2010) The political risk services group, available at http://www.prsgroup.com/icrg.aspx (Accessed 10 October 2010).

Islam, N., (1995). “Growth Empirics: A Panel Data Approach”. The Quarterly Journal of Economics, 110, (4), pp. 1127-1170.

Khandelwal, P., & Roitman, A., (2012). “The Economics of Political Transitions: Implications for the Arab Spring”, IMF Working Paper No. 13/69, Washington.

Koh, W. T. H., (2007). “Terrorism and its impact on economic growth and technological innovation”, Technological Forecasting and Social Change, 74(2), pp. 129-138.

Lalountas, D.A., Manolas, G.A., & Vavouras, I. S., (2011), “Corruption, globalization and development: How are these three phenomena related?”, Journal of Policy Modeling, 33, pp. 636- 648.

Mankiw, N. G., Romer, D., & Weil, D. N., (1992). “A contribution to the empirics of economic growth”, Quarterly Journal of Economics, 107, pp. 407–437.

Mayer-Foulkes, D., (2010). “Divergences and Convergences in Human Development”. UNDP Human Development Research Paper 2010/20.

Meierrieks, D., & Gries, T., (2013). “Causality between terrorism and economic growth”, Journal of Peace Research, 50(1), pp. 91-104.

Miller, S. M., & Upadhyay, M. P., (2002). “Total factor productivity and the convergence hypothesis”, Journal of Macroeconomics 24, pp. 267-286.

Narayan, P.K., Mishra, S., & Narayan, S., (2011). “Do market capitalization and stocks traded converge? New global evidence”. Journal of Banking and Finance, 35, pp.2771-2781.

Oreopoulos, P., & Salvanes, K. G., (2009). “How Large are Returns to Schooling? Hint: Money Isn’t Everything.”, NBER Working Paper No. 15339, Massachusetts.

Pritchett, L., (1997). “Divergence, Big Time”. Journal of Economic Perspectives, 11(3), pp. 3-17.

Prochniak, M., & Witkowski, B., (2012a). “Beta convergence stability among “Old” and “New” EU countries: The Bayesian Model Averaging Perspective”, Warsaw School of Economics.

Prochniak, M., & Witkowski, B., (2012b). “Real economic convergence and the impact of monetary policy on economic growth of the EU countries: The analysis of time stability and the identification of major turning points based on the Bayesian methods”, Warsaw School of Economics.

Solow, R. M., (1956). “A contribution to the theory of economic growth”, Quarterly Journal of Economics, 70, pp. 65-94.

Straus, S., (2012). “Wars do end. Changing Patterns of Political Violence in Sub-Saharan Africa”, African Affairs, 111(443), pp. 179-201.

Swan, T., (1956). “Economic growth and capital accumulation”. Economic Record, 32, pp. 334-361.

Thomas, K.W., (1992). Conflict and negotiation processes in organisations. In: Dunnette, M.D. and L.M. Hough eds. Handbook of industrial and organisational psychology. Palo Alto, CA, Consulting Psychologists Press. pp. 651-717.

Volkema, R. J., & Bergmann, T. J., (1995). “Conflict styles as indicators of behavioural patterns in interpersonal conflicts”. The Journal of Social Psychology, 135 (1), pp. 5-15.