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New wine in old wineskins? Growth, terrorism and the resource curse in sub-Saharan Africa

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  • Blomberg, S. Brock
  • Broussard, Nzinga H.
  • Hess, Gregory D.

Abstract

Since 1995, growth in sub-Saharan Africa has averaged more than 5% per year reversing a two-decade decline of real income per capita. In this paper, we explore the extent to which the nascent growth is sustainable or not due to higher incidences of terrorism and commodity price declines. Our analysis is based on a rich unbalanced panel data set with annual observations on 46 countries from 1968 to 2004. We explore these data with cross-sectional and panel growth regression analysis and quantile regressions. We estimate the economic and statistical effect of terrorism on growth in sub-Saharan Africa, controlling for a variety of other factors. We then investigate the extent to which there appears to be a structural break in the estimated relationships. We find that the terrorist-oriented fragility of sub-Sahara has increased in the most recent period. We find that most of the fragility can be explained by the growth in countries that are primary fuel exporters. Indeed, our evidence points to the fact that resource-rich countries have not done an adequate job of investing in counter-terrorist policies.

Suggested Citation

  • Blomberg, S. Brock & Broussard, Nzinga H. & Hess, Gregory D., 2011. "New wine in old wineskins? Growth, terrorism and the resource curse in sub-Saharan Africa," European Journal of Political Economy, Elsevier, vol. 27(S1), pages 50-63.
    • Handle: RePEc:eee:poleco:v:27:y:2011:i:s1:p:s50-s63
    DOI: 10.1016/j.ejpoleco.2011.06.004
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    3. Peter Egger & Martin Gassebner, 2015. "International terrorism as a trade impediment?," Oxford Economic Papers, Oxford University Press, vol. 67(1), pages 42-62.
    4. Khusrav Gaibulloev & Todd Sandler & Donggyu Sul, "undated". "Reevaluating Terrorism and Economic Growth: Dynamic Panel Analysis and Cross-Sectional Dependence," Economics Working Papers 02-03/2013, School of Business Administration, American University of Sharjah.
    5. S. Brock Blomberg & Ricardo Fernholz & John-Clark Levin, 2013. "Symposium - Terrorism and the Invisible Hook," Southern Economic Journal, Southern Economic Association, vol. 79(4), pages 849-863, April.
    6. S. Brock Blomberg & Ricardo Fernholz & John-Clark Levin, 2013. "Symposium - Terrorism and the Invisible Hook," Southern Economic Journal, John Wiley & Sons, vol. 79(4), pages 849-863, April.
    7. Younas, Javed, 2015. "Terrorism, openness and the Feldstein–Horioka paradox," European Journal of Political Economy, Elsevier, vol. 38(C), pages 1-11.
    8. S. Brock Blomberg & Ricardo Fernholz & John-Clark Levin, 2013. "Terrorism and the Invisible Hook," Southern Economic Journal, John Wiley & Sons, vol. 79(4), pages 849-863, April.
    9. Yasir Khan & Cai ShuKai & Taimoor Hassan & Jawed Kootwal & Muhammad Nisar Khan, 2021. "The links between renewable energy, fossil energy, terrorism, economic growth and trade openness: the case of Pakistan," SN Business & Economics, Springer, vol. 1(9), pages 1-25, September.
    10. Assoumi Harouna Abdoul Karim, 2021. "Transnational Terrorism in the West African and the Sahel Region: An Exploration of Causes and Remedies," International Journal of Research and Innovation in Social Science, International Journal of Research and Innovation in Social Science (IJRISS), vol. 5(7), pages 477-482, July.
    11. Khusrav Gaibulloev & Todd Sandler, 2023. "Common myths of terrorism," Journal of Economic Surveys, Wiley Blackwell, vol. 37(2), pages 271-301, April.
    12. Abdulkarim Yusuf & Saidatulakmal Mohd, 2023. "Growth and Fiscal Effects of Insecurity on the Nigerian Economy," The European Journal of Development Research, Palgrave Macmillan;European Association of Development Research and Training Institutes (EADI), vol. 35(4), pages 743-769, August.
    13. Yuanyuan Zhu & Xiaoqi Zhou & Yilin Gan & Jing Chen & Ruilin Yu, 2021. "Spatio-Temporal Differentiation and Driving Mechanism of the “Resource Curse” of the Cultivated Land in Main Agricultural Production Regions: A Case Study of Jianghan Plain, Central China," IJERPH, MDPI, vol. 18(3), pages 1-17, January.
    14. Mohammadi, Teymour & Jahangard, Fateme & Khani Hoolari, Seyed Morteza, 2014. "The relationship between reserves of oil endowment and economic growth from the resource curse viewpoint: a case study of oil producing countries," MPRA Paper 56092, University Library of Munich, Germany.
    15. Zheng, Mingbo & Feng, Gen-Fu & Jang, Chyi-Lu & Chang, Chun-Ping, 2021. "Terrorism and green innovation in renewable energy," Energy Economics, Elsevier, vol. 104(C).
    16. Assoumi Harouna Abdoul Karim, 2021. "Transnational Terrorism in the West African and the Sahel Region: An Exploration of Causes and Remedies," International Journal of Research and Innovation in Social Science, International Journal of Research and Innovation in Social Science (IJRISS), vol. 5(07), pages 477-482, July.
    17. Steven Buigut & Djesika D. Amendah, 2016. "Effect of terrorism on demand for tourism in Kenya," Tourism Economics, , vol. 22(5), pages 928-938, October.
    18. Chuku Chuku & Isip Ima-Abasi & Abang Dominic, 2017. "Working Paper 284 - Growth and Fiscal Consequences of Terrorism in Nigeria," Working Paper Series 2410, African Development Bank.
    19. Thakerngkiat, Narongdech & Nguyen, Hung T. & Nguyen, Nhut H. & Visaltanachoti, Nuttawat, 2023. "Does fear spur default risk?," International Review of Economics & Finance, Elsevier, vol. 83(C), pages 879-899.

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    More about this item

    Keywords

    Growth; Conflict; Terrorism;
    All these keywords.

    JEL classification:

    • E6 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook
    • D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances; Revolutions
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development

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