Munich Personal RePEc Archive

The role of inclusive development and military expenditure in modulating the effect of terrorism on governance

Asongu, Simplice and Nwachukwu, Jacinta and le Roux, Sara (2018): The role of inclusive development and military expenditure in modulating the effect of terrorism on governance. Forthcoming in: Journal of Economic Studies

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Abstract

Purpose- The study investigates the role of inclusive human development and military expenditure in modulating the effect of terrorism on governance.

Design/methodology/approach- It is based on 53 African countries for the period 1998-2012 and interactive Generalised Method of Moments is employed. Six governance indicators from the World Bank and two terrorism variables are used, namely: domestic and transnational terrorism dynamics.

Findings- The following main findings are established. There is a negative net effect on governance (regulation quality and corruption-control) when inclusive human development is used to reduce terrorism. There is a positive net impact on governance (“voice and accountability” and rule of law) when military expenditure is used to reduce domestic terrorism.

Originality/value- We have complemented the sparse literature on the use of policy variables to mitigate the effect of policy syndromes on macroeconomic outcomes.

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