The Effects of Terrorism on Turkish Financial Markets

Abstract

In this research, we analyzed how Turkish financial markets and foreign investors in the stock market reacted to the terror attacks in Turkey. Our analysis, which was performed using the terror index for the stock market and the foreign exchange market, revealed that returns, abnormal returns, and cumulative abnormal returns were not affected by the terror attacks; however, foreign investors in the stock market were affected. When the geographic regions of the terror attacks were analyzed, the findings showed that foreign investors were negatively affected mainly by the terror attacks that occurred in southeast Anatolia. Attack type and target type were important only for foreign investors. An evaluation of the interaction between the terror attacks and the markets with the involvement of the terrorist organizations indicated that only the foreign investors in the stock market were affected by Al-Qaeda and PKK-linked terror attacks. An evaluation of the effect of terror attacks in foreign countries on Turkish financial markets revealed no effect on the domestic stock market and foreign exchange markets. We also examined the volatility spillovers from the terror index to the stock market and found that terrorist attacks increased the volatility of the stock market.     

Arms Racing and the Costs of Arms Imports: A Stochastic Model

The paper draws on the demand for arms imports model of Levine and Smith (1995, 1997) using stochastic processes of the birth-death type in steady state. It assumes two antagonistic regional players engaged in an armaments race satisfying their demand for military hardware through imports from the international market. The paper examines the effects that arms imports have on the military balance between the two recipient countries. It constructs a state space of possible outcomes in terms of the military balance/imbalance between the two countries involved. A new variable is introduced which tries to encapsulate the absolute difference in their respective security functions at any moment in time. This variable affects the transition from one state of affairs to the other.     

Clausewitz and the politics of war: A contemporary theory

ABSTRACT

This paper re-examines the theoretical underpinnings of Strategic Studies, proposing a novel theory and a new framework for analysing war’s fundamental relationship with politics in line with the Clausewitzian tradition. Throughout modern history, Clausewitz’s concept of politics has been misconstrued as referring only to policy whereas in fact, for him, ‘politics’ was a much broader concept, including domestic power struggles. The political logic of war is defined here as the convergence of the interrelating factors of power struggles and policy objectives within a given polity that restrains and enables these political forces. The analysis of the Clausewitzian political logic of war is conducted through the sociological ‘liquid modern’ lens. It is argued that with power increasingly shifting from centralised state-oriented political leadership towards market forces, non-state actors and other political bodies, the effectiveness of war has been reduced. This is evident in the fragmentation of Western political systems and, as a result, suboptimal strategy and the domination of domestic power struggles in political decision-making concerning war.     

Smart Power and Military Force: An Introduction

Abstract

Smart power is comprised of two elements: the quest for building society among states and between states and non-state actors; as well as the desire for cleaner forms of power projection. This special issue explores how states continue to fumble over achieving the optimum mix of hard and soft power across several country cases and themed articles. This set of contributions suggests that smart power is not unlike a ‘Swiss Army Knife’ analogy: multifunctional and challenging to choose the right combination of ideational and material tools.     

Endogenous Growth and Defense Expenditures: A New Explanation of the Benoit Hypothesis

This paper develops an endogenous growth model to examine the linkage between military expenditures and economic growth. We adopt the modeling strategy where both the supply side and the demand side effects of national defense are taken into considerations. Our result finds that a rise in military spending tends to stimulate the sustained growth rate, confirming Benoit's famous empirical findings.     

The United States and Humanitarian Assistance and Disaster Relief (HADR) in East Asia: Connecting Coercive and Non-Coercive Uses of Military Power

Abstract

Humanitarian Assistance and Disaster Relief (HADR) is increasingly important for East Asian militaries, but there is little scholarship on how HADR relates to broader national strategies. This article considers US involvement in HADR in East Asia in relation to changing conceptions of national power. HADR is frequently described as use of ‘hard’ military assets to further soft power goals. Looking at recent US experiences, this article shows that HADR also serves instrumental ends linked to traditional military objectives. Rather than considering power as ‘soft’ or ‘hard’, it argues that HADR illustrates connections between non-coercive and coercive uses of military power.     

Strategy in the Age of Artificial Intelligence

ABSTRACT

We argue that Artificial Intelligence (AI) will, in the very near future, have a profound impact on the conduct of strategy and will be disruptive of existing power balances. To do so, we review the psychological foundations of strategy and explore the ways in which AI will impact human decision-making. We then review current and evolving capabilities in ‘narrow’, modular AI that is optimised to perform in a particular environment, and explore its military potential. Lastly, we look ahead to the more distant prospect of a general AI.     

The Czech defence and security industry: taking the pulse to an ailing man

ABSTRACT

The paper summarises the evolution of the iron triangle of the mutual relationships amongst the ministry of defence, defence industry, and the political elite in the post-communist Czech Republic in 1990-2020. The essay stresses the oddness of this relationship. On the one hand, the government is bound by a partnership to the Defence and Security Industry Association of the Czech Republic (DSIA), a lobbying group of more than 100 organisations that conduct business in defence and security sector in Czechia. Yet, since its creation in 2000, this assemblage of industries within DSIA's market position is falling, in fact. Neither political parties in power, nor the governments have been able to support national defence industry through the small military. Just a few DSIA national members are able to compete internationally with their cutting-edge products. Others have evolved into middlemen trading intime-expired Czechoslovak equipment retired from the Czech Armed Forces.     

An integrated electric power supply chain and fuel market network framework: Theoretical modeling with empirical analysis for New England

In this article, we develop a novel electric power supply chain network model with fuel supply markets that captures both the economic network transactions in energy supply markets and the physical network transmission constraints in the electric power network. The theoretical derivation and analysis are done using the theory of variational inequalities. We then apply the model to a specific case, the New England electric power supply chain, consisting of six states, five fuel types, 82 power generators, with a total of 573 generating units, and 10 demand market regions. The empirical case study demonstrates that the regional electric power prices simulated by our model match the actual electricity prices in New England very well. We also compute the electric power prices and the spark spread, an important measure of the power plant profitability, under natural gas and oil price variations. The empirical examples illustrate that in New England, the market/grid‐level fuel competition has become the major factor that affects the influence of the oil price on the natural gas price. Finally, we utilize the model to quantitatively investigate how changes in the demand for electricity influence the electric power and the fuel markets from a regional perspective. The theoretical model can be applied to other regions and multiple electricity markets under deregulation to quantify the interactions in electric power/energy supply chains and their effects on flows and prices. © 2009 Wiley Periodicals, Inc. Naval Research Logistics, 2009     

The timing of contests

We develop a simple model to analyze the timing of contests. When the odds of winning a contest are exogenously given – we show that if either the players discount the future or if the total cost of contest is smaller in the future – there exist subgame perfect equilibria where both players settle, anticipating a contest in the future. With endogenous efforts, the aggregate efforts expanded in a contest are smaller if the contest occurs in the future when the relative effort productivities remain constant or diverge over time, thus creating scope for delay in contests. When the effort productivities converge over time, the total efforts may be greater under a future contest. As a consequence, players either settle over the two periods, or else they initiate a contest immediately.     

Nigerian women and the trends of kidnapping in the era of Boko Haram insurgency: patterns and evolution

ABSTRACT

The rising trend of kidnapping targeting women has shown that counterinsurgency does not begin and end with the strategic advantage of state security providers in the security market and the field. Kidnapping of females by Boko Haram insurgents threatens human security and hinders sustainable development goals in Northeastern Nigeria. With primary and secondary sources, this qualitative study examines how Boko Haram insurgents target women in Northeastern Nigeria. The paper argues that community driven security strategy achievable through the collaboration between state and traditional security providers, can prevent the entry and easy escape of the insurgents. It concludes that the forces of order should sustain a policy of stop and searches until insurgents are defeated along with a programme of community-based human rights education and insurgency emergency response system for quick response to security threats.     

Competing for Control over the State: The Case of Yemen

Abstract

This article argues that the current conflict in Yemen is better understood as a competition over who controls the state, rather than as a conflict between the state and a non-state actor. It traces the development of the Houthis and shows how the movement managed to seize key government institutions. However, the Houthis lack internal legitimacy and have not been able to position themselves as a nationally relevant political elite. The fragmentation of the Yemeni state has resulted in a shift to more localized struggles over access to resources and power that involve both internal and external actors.     

Plunder or Trade?

Plunder and trade are theoretically and historically entwined in complex ways. This paper examines when rational players will choose one or both by employing a model of plunder within an evolutionary game theoretic framework. Evolutionary stable strategy equilibria are derived and the replicator dynamics are examined for simple two-by-two symmetric games. Not only are positive defense allocations necessary for trade, implying that all trade is of a contested nature, but the defense technology must also exhibit sufficient effectiveness relative to the plunder technology. A continuum of possible exchanges is proposed that is based on the effectiveness of enforcing property claims. For high levels of transactions costs, plunder dominates. As transactions costs decline, mutual trade emerges as one possible exchange mechanism. All market exchange entails some cost of enforcement; it is contested. Insufficient enforcement of property claims produces mutual plunder as the dominant exchange mechanism. Some implications are suggested for institutional evolution. C7 K4 N4     

Smart Power and Japan’s Self-Defense Forces

Abstract

From Iraq to the Gulf of Aden and the South Pacific, this paper evaluates how far theoretical ideas about smart power manifest in operational missions of the Japan Self-Defense Forces (JSDF). To function within a ‘smart’ power context, this paper suggests that JSDF operates in ‘assisting’ mode, rather than the ‘threatening’ behavior of ‘hard’ power. JSDF also deployed alongside other Japanese ‘soft’ power tools – diplomatic, cultural, developmental, and NGOs, using tailored programs for different cultural and geographical contexts. Given constitutional constraints and public sensitivity towards coercive force, JSDF missions could be integrated more into a ‘whole-of-government’ approach advancing foreign policy goals through ‘smart power’.     

The interaction between local and international power in EU police reform in Bosnia and Herzegovina

ABSTRACT

This article explores the interaction between local and international power structures in EU peacebuilding. While citizens in a state only face order from one authority (the state), local actors in a peacebuilding context are subject to orders from two institutions (the domestic state and the peacebuilding mission). This article explores the nature of interactions of these two institutions and their effect on local police officers’ compliance and resistance. Specifically, it analyzes the example of the police restructuring process in Bosnia and Herzegovina. It demonstrates that the choices of local officers to comply or resist depended on whether the interactions between the EU Police Mission and the local police organization were positive and mutually supportive, or whether they were competitive and contradictory. The findings of the article contribute to the debates on the role of local power and the importance of local legitimacy in peacebuilding.     

Was World War Two a Completely Just War?

ABSTRACT

According to Brian Orend’s binary political model, minimally just states possess a robust set of moral rights, while other states essentially exist in a moral vacuum in which they possess no moral rights. I argue that a more plausible comparative model would allow for a state to acquire (or lose) discrete moral rights as it improves (or damages) its moral record. This would generate a more accurate portrayal of both domestic policy within states and military conflict between states; including, in particular, the role of the Allied forces during World War Two.     

An intervention analysis of terrorism: The spanish eta case

In this paper we evaluate what terrorism policies have worked best in handling the Spanish ETA terrorism using time series data from 1968 to 2000. We consider the political, deterrence and economic effects, and conclude that their influence on terrorism incidents is mixed. A parsimonious model shows that the behaviour of different terrorism incidents is distinct and the lagged effect is a primary concern. A policy to manage this case is devised.     

Defence Procurement Policy: The Way Ahead

Abstract

The Defence Procurement Executive is the single largest customer of British industry and controls some 127 000 contracts. As Chief of Defence Procurement, Dr McIntosh explains the effects of expanding market forces on defence contracts and the suppliers, before continuing to outline the prospects for future competitive contracts in view of the recent cuts in defence budgets.