The Comparative African Economics of Inclusive Development and Military Expenditure in Fighting Terrorism

Asongu, Simplice and Tchamyou, Vanessa and Asongu, Ndemaze and Tchamyou, Nina (2017): The Comparative African Economics of Inclusive Development and Military Expenditure in Fighting Terrorism. Published in: Journal of African Development , Vol. 19, No. 2 (2017): pp. 77-91.

Abstract

This study investigates the role of inclusive human development and military expenditure in fighting terrorism in 53 African countries for the period 1998-2012. The empirical evidence is based on contemporary, non-contemporary and instrumental variable Fixed Effects regressions. Inclusive development is not a sufficient condition for the fight against terrorism whereas military expenditure can be effectively employed to mitigate the phenomenon. Significant negative effects are established only when endogeneity is accounted for by means of non-contemporary and instrumental-variables approaches. Hence, the policy effectiveness of employed tools is contingent on whether they are engaged proactively (i.e. non-contemporarily) or not. From the findings, the propensity of military expenditure to fight transnational terrorism is higher in: (i) middle income countries vis-à-vis their low income counterparts; (ii) oil-rich countries compared to oil-poor countries and (iii) Christian-dominated countries vis-à-vis their Islam-oriented counterparts. Furthermore military expenditure is also more effective at combating domestic and transnational terrorism in: (i) North African countries vis-à-vis their sub-Saharan Africa counterparts; (ii) landlocked countries compared to countries that are open to the sea and (iii) politically-stable countries vis-à-vis their politically-unstable counterparts. Contributions to the comparative economics are discussed. Practical and theoretical contributions are also provided.

• Item Type: MPRA Paper
• Language: English
• Keywords: Terrorism; Inclusive development; Military expenditure; Africa
• Subjects: C - Mathematical and Quantitative Methods > C5 - Econometric Modeling > C52 - Model Evaluation, Validation, and Selection; D - Microeconomics > D7 - Analysis of Collective Decision-Making > D72 - Political Processes: Rent-Seeking, Lobbying, Elections, Legislatures, and Voting Behavior; F - International Economics > F4 - Macroeconomic Aspects of International Trade and Finance > F42 - International Policy Coordination and Transmission; O - Economic Development, Innovation, Technological Change, and Growth > O1 - Economic Development > O16 - Financial Markets ; Saving and Capital Investment ; Corporate Finance and Governance; O - Economic Development, Innovation, Technological Change, and Growth > O3 - Innovation ; Research and Development ; Technological Change ; Intellectual Property Rights > O38 - Government Policy

References

Abadie, A., (2006). “Poverty, Political Freedom and the Roots of Terrorism.” American Economic Review, 95 (2), pp. 50-56.

Akcinaroglu, S., & Radziszewski, E., (2013), “Private Military Companies, Opportunities, and Termination of Civil Wars in Africa”, Journal of Conflict Resolution, 57(5), pp. 5795-5821.

Argomaniz, J., (2015). “European Union responses to terrorist use of the Internet”, Cooperation and Conflict, 50 (2), pp. 250-268.

Arvis, J-F., Marteau, J-F., & Raballand, G. (2007). The cost of being landlocked: logistics costs and supply chain reliability”, Word Bank Working Paper Series No. 4258, Washington.

Alfa-Wali, M., Sritharan, K., Mehes, M., Abdullah, F., & Rasheed, S., (2015). “Terrorism-related trauma in Africa, an increasing problem”, Journal of Epidemiology and Global Health, 5(2), pp. 201-203.

Asongu, S., Efobi, U., & Beecroft, I., (2015). “Inclusive human development in pre-crisis times of globalisation-driven debts”, African Development Review, 27(4), pp.428-442.

Asongu, S. A., & Kodila-Tedika, O., (2017). “Trade, aid and terror”, International Journal of Development Issues, 16 (1), pp.2-24,

Asongu, S. A., & Le Roux S., (2017). “Enhancing ICT for inclusive human development in Sub-Saharan Africa”, Technological Forecasting and Social Change, 118(May), pp. 44-54.

Asongu, S. A., & Nwachukwu, J. C., (2016a). “Conditional linkages between iron ore exports, foreign aid and terrorism”, Mineral Economics, 29(2), pp. 57-70.

Asongu, S. A., & Nwachukwu, J. C., (2016b). “Revolution empirics: predicting the Arab Spring”, Empirical Economics, 51(2), pp. pp 439-482.

Asongu, S. A., & Nwachukwu, J. C., (2016c). “The Comparative Inclusive Human Development of Globalisation in Africa”, Social Indicators Research. DOI: 10.1007/s11205-016-1467-2.

Asongu, S. A., & Nwachukwu, J. C., (2017a). “Increasing Foreign Aid for Inclusive Human Development in Africa”, Social Indicators Research, DOI: 10.1007/s11205-017-1668-3.

Asongu, S. A., & Nwachukwu, J. C., (2017b). “The Impact of Terrorism on Governance in African Countries”, World Development. DOI: 10.1016/j.worlddev.2017.05.023.

Asongu, S. A., & Nwachukwu, J. C., (2017c). “Fighting Terrorism: Empirics on Policy Harmonization”, German Economic Review. DOI: DOI: 10.1111/geer.12126.

Asongu, S. A., Tchamyou, V. S ., & Tchamyou, N. P., (2016a). “Fighting Terrorism in Africa: Evidence from Bundling and Unbundling Institutions”. In The Comparative African Economics of Fighting Terrorism; CODESRIA, Dakar.

Asongu, S. A., Tchamyou, V. S ., & Tchamyou, N. P., (2016b). “The Comparative African Economics of Governance in Fighting Terrorism”. In The Comparative African Economics of Fighting Terrorism; CODESRIA, Dakar.

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

Barros, C. P., Faira, J. R., & Gil-Alana, L. A., (2008). “Terrorism against American citizens in Africa: Related to poverty?”, Journal of Policy Modeling, 30(1), pp. 55-69.

Bass, L., (2014). “What Motivates European Youth to Join ISIS?”, Syria Comment, http://www.joshualandis.com/blog/push-factors-helping-isil-recruitment-loretta-bass/ (Accesed: 01/12/2015).

Basuchoudhary, A., & Shughart, W.F. (2010). “On ethnic conflict and the origins of transnational terrorism”. Defence and Peace Economics, 21(1), pp. 65-87.

Baten, J., & Mumme, C. (2013). “Does inequality lead to civil wars? A global long-term study using anthropometric indicators (1816–1999)”. European Journal of Political Economy, 32, pp. 56-79.

Benmelech, E., Berrebi. C., & Klor. E. F., (2012). “Economic Conditions and the Quality of Suicide Terrorism.” Journal of Politics, 74(1), pp. 113-128.

Blomberg, S. B., Hess, G. D., & Weerapana, A., (2004). “Economic Conditions and Terrorism.” European Journal of Political Economy, 20(2), pp. 463-478.

Bueno de Mesquita E., (2005). “Quality of Terror.” American Journal of Political Science, 49 (3), pp. 515-530.

Caruso, R., & Schneider, F., (2011). “The socio-economic determinants of terrorism and political violence in Western Europe (1994–2007)”. European Journal of Political Economy, 27(1), S37- S49.

Cederman, L.-E., Weidman, N.B., & Gleditsch, K.S. (2011). “Horizontal inequalities and ethnonationalist civil war: A global comparison”. American Political Science Review, 105(3), pp. 478-495.

Choi, S-W., & Salehyan , I., (2013). “No Good Deed Goes Unpunished: Refugees, Humanitarian Aid, and Terrorism”, Conflict Management and Peace Sciences, 30(1), pp. 53-75.

Clavarino, T., (2014). “Africa, the new outpost of terrorism”, RT op-edge. https://www.rt.com/op-edge/180996-africa-outpost-islamic-terrorism/ (Accessed: 20/01/2016).

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

Efobi, U., & Asongu, S. A., (2016). “Terrorism and capital flight from Africa”, International Economics, 148 (December), pp. 81-94.

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.

Elu J., & Loubert, L., (2013). “Earnings Inequality and the Intersectionality of Gender and Ethnicity In SubSaharan Africa: The Case of Tanzanian Manufacturing”, American Economic Review, Papers and Proceedings 04/2013, 103(103), pp. 289-292.

Enders, W., & Sandler, T., (2006). The Political Economy of Terrorism. New York: Cambridge University Press.

Enders W, Sandler T & Gaibulloev K., (2011). “Domestic versus transnational terrorism: Data, decomposition, and dynamics”. Journal of Peace Research, 48(3), pp. 319–337.

Ewi, M., & Aning, E., (2006). “Assessing the role of the African Union in preventing and combating terrorism in Africa”, African Security Review, 15(3), pp. 32-46.

Fazel, A., (2013). “The growing terrorism threat in Africa”, Mail&Guardian, http://mg.co.za/article/2013-12-17-the-growing-terrorism-threat-in-africa (Accessed: 20/01/2016).

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

Foster, P., (2014). “Jihadists from around the world flock to fight with Isil; UN”, The Telegraph. http://www.telegraph.co.uk/news/worldnews/islamic-state/11200701/Jihadists-from-around-the-world-flock-to-fight-with-Isil-UN.html (Accessed: 01/12/2015).

Fosu, A. K., (2008). “Inequality and the Growth-Poverty Nexus: Specification Empirics Using African Data”, Applied Economics Letters, 15(7), pp. 563-566.

Fosu, A. K., (2009). “Inequality and the Impact of Growth on Poverty: Comparative Evidence for Sub-Saharan Africa”, Journal of Development Studies, 45(5), pp. 726-745.

Fosu, A. K., (2010a). “The Effect of Income Distribution on the Ability of Growth to Reduce Poverty: Evidence from Rural and Urban African Economies”, American Journal of Economics and Sociology, 69(3), pp. 1034-1053.

Fosu, A. K., (2010b). “Does Inequality Constrain Poverty Reduction Programs? Evidence from Africa”, Journal of Policy Modeling, 32(6), pp. 818-827.

Fosu, A. K., (2010c). “Inequality, Income and Poverty: Comparative Global Evidence”, Social Sciences Quarterly, 91(5), pp. 1432-1446.

Fosu, A. K., (2015a). “Growth, Inequality and Poverty in Sub-Saharan Africa: Recent Progress in a Global Context”, Oxford Development Studies, 43(1), pp. 44-59.

Fosu, A. K. (2015b). Growth and Institutions in African Development, First edited by Augustin K. Fosu, Routledge Studies in Development Economics: New York.

Fosu, A. K. (2015c). Growth and institutions in African Development, in Growth and Institutions in African Development, First edited by Augustin K. Fosu, 2015, Chapter 1, pp. 1-17, Routledge Studies in Development Economics: New York.

Freytag, A., Krüger, J.J., Meierrieks, D., Schneider, F. (2011). “The origins of terrorism: Cross-country estimates of socio-economic determinants of terrorism”. European Journal of Political Economy, 27(S1), pp. 5-16.

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

Gailbulloev, K., Sandler, T., & Santifort, C., (2012). “Assessing the Evolving Threat of Terrorism”, Global Policy, 3(2), pp. 135-144.

Gassebner, M., & Luechinger, S., (2011). “Lock, Stock, and Barrel: A Comprehensive Assessment of the Determinants of Terror.” Public Choice, 149 (3-4), pp. 235-261.

Gries, T., Krieger, D., & Meierrieks, D. (2011). “Causal linkages between domestic terrorism and economic growth”. Defence and Peace Economics, 22(5), pp. 493-508.

Gurr, T.R. (1970). Why Men Rebel. Princeton University Press: Princeton.

Holbrook, D., (2015). “A critical analysis of the role of the internet in the preparation and planning of acts of terrorism”, Dynamics of Asymmetric Conflict: Pathways toward terrorism and genocide, 8(2), pp. 121-133.

Krieger, T., & Meierrieks, D., (2015). “Does Income Inequality Lead to Terrorism? Evidence from the Post-9/11 Era”, Discussion Paper Series, Wilfried Guth Endowed Chair for Constitutional Political Economy and Competition Policy, University of Freiburg, No. 2015-04.

Kuada, J., (2015). Private Enterprise-Led Economic Development in Sub-Saharan Africa The Human Side of Growth First edition by Kuada, J, Palgrave Macmillan: New York.

Krueger, A.B., & Laitin, D., (2008). “Kto Kogo? A Cross-country Study of the Origins and Targets of Terrorism.” In Terrorism, Economic Development, and Political Openness, edited by Philip Keefer and Norman Loaya, 148-73. New York: Cambridge University Press.

Krueger, A. B., & Maleckova. J., (2003). “Education, Poverty, and Terrorism: Is There a Causal Connection?” Journal of Economic Perspectives, 17(4), pp. 119-144.

Leautier, F. A., (2012). “What Role for Africa After 50 Years of Independence: Provider of Natural Resources or a New Global Leader?”, Journal of African Development, 14(1), pp. 127-151.

Li, Q., (2005). “Does Democracy Promote Transnational Terrorist Incidents?” Journal of Conflict Resolution, 49 (2), pp. 278-297.

Li, Q., & Schaub, D., (2004). “Economic Globalization and Transnational Terrorism”, Journal of Conflict Resolution, 48(2), pp. 230-258.

Lum, C., Kennedy, L.W., & Sherley, A. J. (2006). “The effectiveness of counter-terrorism strategies. A Campbell Systematic Review”, Crime and Justice, 2(2), pp.1-49.

Mlachila, M., Tapsoba, R., & Tapsoba, S. J. A., (2016). “A Quality of Growth Index for Developing Countries: A Proposal”, Social Indicators Research. DOI: 10.1007/s11205-016-1439-6.

Muller, E.N., & Weede, E. (1994). “Theories of rebellion: Relative deprivation and power contention”. Rationality and Society, 6(1), pp. 40-57.

Narayan, P.K., Mishra, S., & Narayan, S., (2011). “Do market capitalization and stocks traded converge? New global evidence”. Journal of Banking and Finance, 35(10), pp.2771-2781.

Obeng-Odoom, F. (2015). “Africa: On the Rise, but to Where?”, Forum for Social Economics, 44(3), pp. 234-250.

Obeng-Odoom, F. (2017). “The myth of economic growth in Africa”, Review of African Political Economy, DOI: 10.1080/03056244.2017.1313217.

Odhiambo, N. M., (2011). “Growth, Employment and Poverty in South Africa: In Search of a Trickle-Down Effect”, Journal of Income Distribution, 20(1), pp. 49-62.

Odhiambo, N. M., (2009). “Finance-growth-poverty nexus in South Africa: A dynamic causality linkage”, Journal of Behavioral and Experimental Economics, 38(2), pp. 320-325.

Omand, D., (2005). “Countering international terrorism: the use of strategy”. Survival, 47(4), pp. 107-116.

Østby, G., (2008). “Polarization, horizontal inequalities and violent civil conflict”. Journal of Peace Research, 45(2), pp.143-162.

Piazza, J. A., (2006). “Rooted in Poverty? Terrorism, Poor Economic Development, and Social Cleavages.” Terrorism and Political Violence, 18 (1), pp. 159-77.

Piazza, J. A., (2011). “Poverty, Minority Economic Discrimination and Domestic Terrorism”, Journal of Peace Research, 48 (3), pp. 339-353.

Piazza, J. A., (2013). “The Cost of Living and Terror: Does Consumer Price Volatility Fuel Terrorism?” Southern Economic Journal, 79 (4), pp. 812-831.

Pinkivskiy, M., & Sala-i-Martin, X., (2014). “Africa is on time”, Journal of Economic Growth, 19(3), pp. 311-333.

Poulton, C., (2014). “Democratisation and the Political Incentives for Agricultural Policy in Africa”. Development Policy Review, 32(S2), pp. S101-S122.

Price, G. N., & Elu, J., (2016). “Global Warming And Cross-State Islamist Terrorism In Nigeria”, Department of Economics, Morehouse College, Atlanta GA, 30314.

Resnick, D., (2015). “The Political Economy of Africa's Emergent Middle Class: Retrospect and Prospects”, Journal of International Development, 27(5), pp. 573-587.

Rodrik, D., (2015). “Premature Deindustrialization”, IAS School of Social Science Economic Working Paper No. 107, Princeton University.

Sandler, T. (2005). “Collective versus unilateral responses to terrorism”. In Policy Challenges and Political Responses, Springer USA, pp. 75-93. DOI: 10.1007/0-387-28038-3_5.

Savun, B., & Phillips, B. J., (2009). “Democracy, foreign policy, and terrorism”. Journal of Conflict Resolution, 53(6), pp. 878-904.

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

Tonwe, D. A., & Eke, S. J., (2013). “State fragility and violent uprisings in Nigeria”, African Security Review, 22(4), pp. 232-243.

World Bank (2015). “World Development Indicators’, World Bank Publications http://www.gopa.de/fr/news/world-bank-release-world-development-indicators-2015 (Accessed: 25/04/2015).