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THE IMPACT OF TERRORISM AND CONFLICTS ON GROWTH IN ASIA
Author(s) -
GAIBULLOEV KHUSRAV,
SANDLER TODD
Publication year - 2009
Publication title -
economics and politics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.822
H-Index - 45
eISSN - 1468-0343
pISSN - 0954-1985
DOI - 10.1111/j.1468-0343.2009.00347.x
Subject(s) - terrorism , gross domestic product , per capita , development economics , government (linguistics) , per capita income , crowding out , economics , domestic terrorism , government spending , investment (military) , panel data , international trade , economic growth , political science , macroeconomics , market economy , population , linguistics , philosophy , demography , sociology , politics , welfare , law , econometrics
This paper quantifies the impact of terrorism and conflicts on income per capita growth in Asia for 1970–2004. Our panel estimations show that transnational terrorist attacks had a significant growth‐limiting effect. An additional terrorist incident per million persons reduces gross domestic product per capita growth by about 1.5%. In populous countries, many additional attacks are needed to achieve such a large impact. Transnational terrorism reduces growth by crowding‐in government expenditures. Unlike developing countries, developed countries are able to absorb terrorism without displaying adverse economic consequences. An internal conflict has the greatest growth concern, more than twice that of transnational terrorism. Conflict variables are associated with smaller investment shares and increased government spending, with the crowding‐in of government spending being the dominant influence.