The Economic Consequences of the Libyan Spring: A Synthetic Control Analysis

Abstract

In 2011 a wave of revolutionary movements, the so-called Arab Spring, spread in the Middle East and North Africa. Libya was one of the most affected countries, ending Gaddafi’s dictatorship after an international intervention and a civil war. This paper assesses the effects that this revolution had on Libyan economy. The analysis is made by means of the synthetic control method. Our estimates for the 2011–2014 period show (i) a cumulative loss in the growth rate of per capita real GDP of 64.15%; (ii) a cumulative loss in per capita real GDP of 56,548 dollars; and (iii) a cumulative loss in the aggregate real GDP of 350.5 billion dollars.     

Turkish commanders discuss counterterrorism strategies and lessons learned from 25 years of fighting the PKK

This article is an extended book review of the Turkish book Commanders' Front (Komutanlar Cephesi, Istanbul: Detay Publishing, 2007), written by prominent Turkish journalist Fikret Bila, who compiled a series of interviews with retired Turkish military commanders and two former presidents. It provides a foreign perspective on counterinsurgency/terrorism strategies and lessons learned from Turkey's small war against the Kurdistan Workers' Party (PKK). The interviews reveal the generals' views on Turkey's long-standing fight with the PKK, discussing topics ranging from the social aspect of the PKK problem to mistakes made in arming local militia. In addition, it presents the Turkish perspective on US policy in Iraq.     

Building Legitimacy: Interactional Dynamics and the Popular Evaluation of the Kurdistan Workers’ Party (PKK) in Turkey

Abstract

Previous research has identified a variety of general mechanisms to explain how insurgents build legitimacy. Yet, there is often a gap between these mechanisms and the interactional dynamics of insurgencies. This article attempts to bridge this gap through a theoretically informed analysis of the Kurdistan Workers’ Party’s (PKK) insurgency in Turkey. I show how the PKK’s efforts to cultivate legitimacy, Turkey’s counterinsurgency strategies, and civilian perceptions of the PKK, all mutually influenced one another. Based on this analysis, I argue that the mechanisms that produce popular legitimacy coevolve with insurgents’ behaviors, states’ interventions, and civilians’ perceptions.     

Growth and Fiscal Consequences of Terrorism in Nigeria

Abstract

In spite of government counter-terrorism expenditure and efforts, the incidence of terrorism in Nigeria appears to be rising. This paper examines the growth and fiscal consequences of terrorism in Nigeria by estimating the terrorism–macroeconomy relation using different measures of terror incidence. The results show that terrorism has an economically and statistically significant negative impact on growth; although this impact is considerably small and short-lived, manifesting only after a lag of about three years. Specifically, the cost of terrorism to Nigeria, in terms of lost GDP per annum, is estimated at 0.82%. Moreover, there is evidence that terrorism leads to the reallocation of economic activity away from private investment spending to government spending; that is, terrorism crowds out investment at a higher rate than its potential to crowd in government spending. Lastly, terrorism alters the composition of government expenditure – with the defence component of government expenditure rising vis-a-vis other expenditure items. The results are robust to allowing for dynamic interactions between terrorism and macroeconomic aggregates.     

The Kurdistan Workers' Party (PKK) and popular support: counterterrorism towards an insurgency nature

The PKK has been a prolonged problem in Turkey, and various measures have been adopted to diminish and end the violence. In addition to the impacts on violence, these policies have also had an impact on public opinion and ethnic awareness of Kurds in Turkey. This article analyzes these policies and their effects on electoral support for the PKK by examining the vote shares of the pro-PKK political parties in national and local elections. It concludes that Turkey has conceptualized the issue solely as a problem of terrorism, but the goal, strategy, organization, and format of violence used by the PKK reflect the nature of an insurgency. Therefore, it is argued that Turkey, by ignoring the insurgency features, has disregarded the legitimate parts of the cause and related popular support, and thus has responded mostly with deterrent measures apart from the reforms of recent years. Results have shown that policies of deterrence culminated in a steady level of support for the PKK indicating that low level of legitimacy – as they were perceived by the people – of the policies resulted in viable popular and political support for the PKK. Despite the recent accommodative reforms, the existence of pro-PKK parties rallying electoral support in the political arena provided sustained level activities in the conventional politics in Turkey's municipal and national political system, in which they pursue pro-PKK agendas, such as ‘Autonomy’ and ‘Confederation’ as well as activities to increase the distinction in identity around the ethnic consciousness for more popular support. Yet, no clear pattern is identified between violence level and popular support in the macro-scale.     

Book review

This paper investigates the economic roots of separatist terrorism in Turkey. The political conventional wisdom is that poverty in highly Kurdish‐populated, south‐eastern Turkey is one of the most important causes of separatist terrorism and Turkish–Kurdish conflict in Turkey. Therefore, many economic policies have been implemented to improve the economic conditions in the south‐eastern part of the country. Using the Global Terrorism Database and Vector Autoregression (VAR) methodology, I find that there is no causal relationship between economic conditions in south‐eastern Turkey and separatist terrorism. Therefore policy‐makers should be cautious in using economic measures to prevent separatist terrorism in Turkey.     

ANALYSING THE DETERMINANTS OF TERRORISM IN TURKEY USING GEOGRAPHICALLY WEIGHTED REGRESSION

This paper investigates the determinants of provincial terrorism in Turkey taking spatial dimension into account for the time period 1990–2006. Following a traditional global regression analysis, spatial variations in the relationships are examined with geographically weighted regression (GWR) to obtain locally different parameter estimates. Empirical results indicate that increases in income and schooling ratio tend to reduce the provincial average level of terrorism, whereas an increase in unemployment enhances it. Moreover, GWR results indicate that the provincial effects of per capita income and education are more pronounced for the Eastern and South Eastern provinces compared to the Western provinces.     

Country survey military expenditure in Cyprus

Cyprus, a small island state, gained independence from British colonial rule in 1960. For more that half its history as an independent state Cyprus has been under occupation following the 1974 Turkish invasion. Despite the fact that it has faced war, invasion and occupation, Cyprus has allocated a comparatively small proportion of its national income to defence. The average defence burden—military expenditure as a share of GDP—during 1964–98 was around 2.5%. However, as a result of a substantial shift in defence policy during the past decade or so, the defence burden during the 1990s has increased, averaging about 4% of GDP as Cyprus decided to implement an extensive military modernization program aiming to present a more credible military deterrence vis‐a‐vis Turkey. Empirical estimations of a demand function for Cypriot military expenditure suggest that it is positively affected by alliance spillins and external military threat.     

A RANDOM RATIONING MECHANISM WHICH REDUCES THE RISKS OF NO SON LEFT AT HOME

This paper empirically re‐examines the long‐run co‐movements and the causal relationships between GDP and defence expenditures in a multivariate model with real defence expenditure per capita (ME), real GDP per capita (GDP), and real capital stock per capita (K). We apply the view of the aggregate production function to construct the empirical model. Using up‐to‐date data for 27 OECD countries and 62 non‐OECD countries for the 1988–2003 period, we combine cross‐sectional and time series data to re‐investigate the relationship between GDP and ME. Previous studies using time series data may have yielded misleading results on account of the short time span of typical datasets. By contrast, we use recently developed panel unit root tests and heterogeneous panel cointegration tests, and conclude that there is fairly strong evidence in favour of the hypothesis of a long‐run equilibrium relationship between GDP and ME. The long‐run panel regression parameter results, such as the fully modified OLS, indicate that a positive relationship between GDP and ME only holds for OECD countries, whereas a negative relationship from ME to GDP only exists in non‐OECD countries under examination and in the panel as a whole. Furthermore, by implementing the dynamic panel‐based error correction model, we determine that GDP and ME lack short‐run causalities, but do show long‐run bidirectional causalities in both OECD and non‐OECD countries.     

Domestic political and external security determinants of the demand for greek military expenditure

By European Union and NATO standards, Greece consistently allocates substantial human and material resources to defence. The Greek defence burden (i.e. military expenditure as a share of GDP) has invariably been appreciably higher than the EU and NATO averages. The paper applies an autoregressive distributed lag model (ARDL) to present cointegrated estimates of the demand function for Greek military expenditure, in which domestic political factors and external security determinants are incorporated. Our empirical findings suggest that Greek defence spending over the period 1960-1998 has been influenced by both external security concerns, namely Turkey, as well as changes in the domestic political scene.     

Terrorism and the macroeconomy: Evidence from Pakistan

Pakistan with highest number of terrorism related deaths of any country over the past decade, the number exceeding the total terrorism related deaths for both the European and North American continents, provides an ideal laboratory to study impact of terrorism on the macroeconomy. Quasi-Structural VAR, Vector Error Correction Model, Impulse Response Functions and Granger-Causality tests on a sample that covers over 4500 terrorist incidents and consequent 10, 200 deaths [from 1973 to 2010] are employed to study the relationship between terrorism and the macroeconomy. One of the major advantages of the current methodology is that it not only enables one to circumvent the heterogeneity biases inherent in cross-country studies but it also allows distinguishing between short and long-run effects. It is documented that cumulatively terrorism has cost Pakistan around 33.02% of its real national income i.e. terrorism costs Pakistan around 1% of real GDP per capita growth every year.     

Revisiting the Defense–Growth nexus in European countries

This study revisits the long run and dynamic causal linkages between defense spending and economic growth in 15 selected European countries for the period 1988–2010 by utilizing recent developments in non-stationary panel data analysis. To this end, the series properties of per capita defense spending, per capita real capita stocks, and per capita real GDP are investigated by the panel unit root tests with and without breaks that support evidence on unit root. The panel cointegration tests with and without breaks are also subsequently employed to investigate whether there exists a long-run equilibrium relationship between these three variables. Finally, our causality analysis from panel vector error-correction model suggests that there is a feedback relation between real capital stock and real GDP in both short and long run, a one-way Granger causality running from real GDP to defense spending in both short and long run, and defense spending only Granger causes real capital stock in the long run.     

Does Income Inequality Derive the Separatist Terrorism in Turkey?

Separatist terrorism has been a severe problem for Turkey since the mid-1980s. The conventional wisdom contends that economic deprivation in southeastern Turkey is the fundamental reason for the long-running battle against the Kurdish rebels. Considering that there is limited empirical literature on the roots of terrorism in Turkey, yielding conflicting results about the claim that the main cause of terrorism is deprived economic conditions, this study aims to answer whether there is a causal relationship between income inequality and separatist terrorism in Turkey. To this end, the Global Terrorism Data Base for the period of 1973–2006, two Theil indices of pay inequality as proxy for income inequality, and the vector autoregression and Autoregressive Moving Average (ARMA) methods are utilized. The results support the early findings that income inequality, a particular focus in this paper and an essential indicator of economic deprivation, is not a main cause of escalation of separatist terrorism in Turkey.     

Socioeconomic impact of conflict: state of emergency ruling in Turkey

Uprising tensions during 2010 in eastern and southeastern regions of Turkey provoked arguments about the necessity for a State of Emergency (SOE; ‘Ola?anüstü Hal’ in Turkish) declaration in those regions, with a belief of enduring political sustainability. The discussion is inflamed by a speech of the Nationalist Movement Party’s leader about the suggestion to announce a SOE ruling after the death of 24 Turkish soldiers in Hakkari (a city in the southeast of Turkey) in an attack of the PKK (Kurdistan Workers’ Party) on the 19 October 2011. Although a new announcement of SOE did not take place, the discussion itself induced the idea behind this paper which is to provide a quantitative analysis of the SOE in Turkey. In fact, the SOE ruling is not a new concept for Turkey and it has been implemented in 13 cities in the eastern and southeastern regions from 1987 to 2002. Although there have been many discussions about the costs of these 15 years of the SOE ruling in terms of military expenditure and, thus, on the national budget, there is a lack of quantitative analytical examination of the economic and social costs of it. Difference-in-differences analysis reveals negative spillover impacts of the SOE, especially on the forced migration, unemployment, and educational investments. The results also show that SOE ruling is an important factor for the underdevelopment of the eastern and southeastern regions in Turkey and, thus, a new SOE will bring enormous inequalities, both economically and socially, and an intensification of the ethnic tensions in Turkey.     

The Demand for Turkish Defence Expenditure

Although a number of studies concerning Turkish defence-growth relation have been published in recent years, little attention is given the demand for Turkish defence expenditure. This is an important issue for understanding which variables contribute to the determination of the demand for military expenditure. However, it is difficult to develop a general theory or a standard empirical approach for the determination of the demand military expenditure. This study models and estimates the demand for Turkish defence expenditure for the period 1951-1998 using autoregressive distributed lag approach to cointegration (ARDL) following the methodology outlined in Pesaran and Shin (1999). This procedure can be applied regardless of the stationary properties of the variables in the sample and allows for inferences on long-run estimates, which is not possible under alternative cointegration procedures. The findings suggest that Turkish defence spending is determined by NATO's defence spending, Greece's defence spending and some security considerations.     

MILITARY SPENDING AND ECONOMIC GROWTH IN SOUTH ASIA: COMMENT AND RECONSIDERATION

In a recent paper in this journal, Wijewerra and Webb study the connection between military spending and gross domestic product (GDP) in a group of five South Asian countries, finding a small but statistically significant positive relationship between military spending and GDP. This paper reviews their approach and proposes an alternative which tries to deal with the problems of omitted variables and variable construction. It finds, in contrast, that a higher share of military spending in GDP is associated with lower growth of GDP per capita.     

Empirical Investigation into the Determinants of Terrorism: Evidence from Fragile States

Abstract

This study investigates the determinants of terrorism in countries that are in the top category of the Fragile States Index (FSI), and are also prone to terrorism. Panel data for 38 countries mainly from Sub-Saharan Africa, the Middle East and North Africa, and South Asia for the years 2005–2014 are used. Findings from the negative binomial and fixed effects estimation show that fragile state, number of refugees and youth unemployment have positive and significant impacts on terrorism. Military spending is positive but less robust across models. Conversely, FDI and remittances have a negative impact on terrorism with the former less robust. Governance and foreign aid are negative and insignificantly related to terrorism. Policy implications follow from the findings.     

On the Determinants of Terrorism Risk Concern in Europe

We investigate whether differences in terrorism risk are mirrored on terrorism risk perception across European countries for the period 2003–2007. We find that the average propensity for terrorism risk concern is affected by actual risk levels. Country and individual heterogeneity contribute substantially to the variation of observed risk perception. Singles and individuals with white collar jobs are less likely to mention terrorism as one of the most pressing issues their country faces, while political positioning towards the right makes it more likely to be concerned about terrorism. As far as competing risks are concerned, we find that the likelihood terrorism is mentioned, decreases with spending on pensions as a percentage of GDP being higher. Finally, based on the Bayesian framework, we also examined the formation of terrorism risk perceptions, and decompose the observed country-level time series of terrorism activity into a long- and a short-run component. We concluded that the observed risk perception variation is only explained by the long-term trend of terrorism activity countries face.     

The Determinants of Arms Production

This study analyzes the determinants of arms production in 15 countries using annual panel data from 1997 to 2002. The results suggest that real GDP per capita, military expenditures, arms exports, and arms imports are positively related to arms production.     

End of the cycle: assessing ETA’s strategies of terrorism

ABSTRACT

In May 2018, the Basque insurgent group Euskadi Ta Askatasuna (ETA) officially disbanded after a 60-year struggle. This inquiry assesses ETA’s violent campaigns using recent conceptual and theoretical advancements from the field of terrorism studies. Three conclusions concerning the group’s strategies of terrorism are advanced. First, ETA regularly targeted civilians to achieve goals other than coercing the Government of Spain; these objectives included outbidding rival separatist groups and spoiling negotiation processes. Second, ETA’s most rapid period of organizational growth occurred as the result of an aggressive terrorist campaign, demonstrating that civilian targeting can serve as a stimulus to rebel group recruitment. Finally, while terrorism did not advance ETA’s primary political objective of creating an independent Basque state, it did enable the group to assume a leading position within the radical Basque separatist movement, helping extend ETA’s lifespan and making the group an embedded actor within the contentious political processes surrounding the question of Basque self-determination. Collectively, these conclusions support recent theoretical findings arguing that non-state terrorism often enables insurgent groups to prolong their lifespans while paradoxically making it more difficult for them to advance their long-term political objectives.