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Decentralization as a disincentive for transnational terror? An empirical test

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Author Info
Axel Dreher ()
Justina A.V. Fischer ()

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Abstract

Using panel data for a maximum of 109 countries over the years 1976-2000, we empirically analyze the impact of decentralization on the occurrence of transnational terror. Taking account of the potential simultaneity between terror and decentralization, our results show that expenditure decentralization robustly reduces the number of terror events in a country, while political decentralization has no impact.

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Publisher Info
Paper provided by Department of Economics, University of St. Gallen in its series University of St. Gallen Department of Economics working paper series 2008 with number 2008-01.

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Length: 31 pages
Date of creation: Jan 2008
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Handle: RePEc:usg:dp2008:2008-01

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Related research
Keywords: Terrorism; Decentralization; Democracy;

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Find related papers by JEL classification:
D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances
H70 - Public Economics - - State and Local Government; Intergovernmental Relations - - - General
H40 - Public Economics - - Publicly Provided Goods - - - General

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Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Bruno S. Frey & Simon Luechinger, . "How to Fight Terrorism: Alternatives to Deterrence," IEW - Working Papers iewwp137, Institute for Empirical Research in Economics - IEW. [Downloadable!]
  2. Alberto Abadie, 2004. "Poverty, Political Freedom, and the Roots of Terrorism," NBER Working Papers 10859, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  3. Bruno S. Frey & Simon Luechinger & Alois Stutzer, . "Calculating Tragedy: Assessing the Costs of Terrorism," IEW - Working Papers iewwp205, Institute for Empirical Research in Economics - IEW. [Downloadable!]
    Other versions:
  4. Axel Dreher & Martin Gassebner & Lars-H. R. Siemers, 2007. "Does Terror Threaten Human Rights? Evidence from Panel Data," CESifo Working Paper Series CESifo Working Paper No. , CESifo Group Munich. [Downloadable!]
    Other versions:
  5. Douglas Staiger & James H. Stock, 1997. "Instrumental Variables Regression with Weak Instruments," Econometrica, Econometric Society, vol. 65(3), pages 557-586, May.
    Other versions:
  6. Dreher, Axel & Gassebner, Martin, 2008. "Does political proximity to the U.S. cause terror?," Economics Letters, Elsevier, vol. 99(1), pages 27-29, April. [Downloadable!] (restricted)
  7. Martin Gassebner & Richard Jong-A-Pin & Jochen O. Mierau, 2007. "Terrorism and Cabinet Duration: An Empirical Analysis," Working papers 07-181, KOF Swiss Economic Institute, ETH Zurich. [Downloadable!]
  8. Bruno S. Frey & Simon Luechinger & Alois Stutzer, 2004. "Valuing Public Goods: The Life Satisfaction Approach," CREMA Working Paper Series 2004-11, Center for Research in Economics, Management and the Arts (CREMA). [Downloadable!]
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  9. Christos Kotsogiannis & Robert Schwager, 2005. "On the Incentives to Experiment in Federations," CESifo Working Paper Series CESifo Working Paper No. , CESifo Group Munich. [Downloadable!]
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  10. Bruno S. Frey & Simon Luechinger, . "Measuring Terrorism," IEW - Working Papers iewwp171, Institute for Empirical Research in Economics - IEW. [Downloadable!]
  11. Sandler, Todd & Enders, Walter, 2004. "An economic perspective on transnational terrorism," European Journal of Political Economy, Elsevier, vol. 20(2), pages 301-316, June. [Downloadable!] (restricted)
  12. Jan Schnellenbach, 2006. "Appeasing nihilists? Some economic thoughts on reducing terrorist activity," Public Choice, Springer, vol. 129(3), pages 301-313, December. [Downloadable!] (restricted)
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  13. Frey, Bruno S. & Stutzer, Alois, 2000. "Happiness, Economy and Institutions," CESifo Working Paper Series CESifo Working Paper No. , CESifo Group Munich. [Downloadable!]
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  14. Fisman, Raymond & Gatti, Roberta, 2002. "Decentralization and corruption: evidence across countries," Journal of Public Economics, Elsevier, vol. 83(3), pages 325-345, March. [Downloadable!] (restricted)
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Full references

Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Tim Krieger & Daniel Meierrieks, 2008. "What causes terrorism?," Working Papers 12, University of Paderborn, CIE Center for International Economics. [Downloadable!]
  2. Nauro F. Campos & Martin Gassebner, 2009. "International Terrorism, Political Instability and the Escalation Effect," Working papers 09-220, KOF Swiss Economic Institute, ETH Zurich. [Downloadable!]
    Other versions:
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