Peace, Terrorism, or Civil Conflict? Understanding the Decision of an Opposition Group

When do opposition groups decide to mount a terrorism campaign and when do they enter an open civil conflict against the ruling government? This paper models an opposition group's choice between peace, terrorism, and open conflict. Terrorism emerges if executive constraints are intermediate and rents are sizeable. Open conflict is predicted to emerge under poor executive constraints. Analyzing country-level panel data firmly supports these hypotheses, even when relying on within-country variation only in a fixed-effects framework. In particular, both the incidence of terrorism and the likelihood of terrorism onset increase under intermediate executive constraints (following an inverted U-shape) and if large rents are available from natural resources, oil, or foreign development assistance. A one-standard-deviation increase in rents raises casualties by approximately 15 percentage points. Related to civil conflict, moving from an authoritarian regime to comprehensive executive constraints is associated with a decrease in the number of battle-related deaths by approximately 74 percentage points. These findings can help us to better understand and anticipate the underlying decision of opposition groups and their choice between peace, a terrorism campaign, and open conflict

Volatility and Growth: Governments are Key

There exists a persistent disagreement in the literature over the effect of business cycles on economic growth. This paper offers a solution to this disagreement, suggesting that volatility carries a positive direct effect, but also a negative indirect effect, operating through the insurance mechanism of government size. Theoretically, the net growth effect of volatility is then ambiguous. The paper reveals the underlying endogeneity of government size in a balanced panel of 95 countries from 1961 - 2010. In practice, the negative indirect channel dominates in democracies, but with less power to choose public services in autocratic regimes the positive direct effect takes over. Consequently, volatile growth rates are detrimental to growth in democracies, but beneficial to growth in autocracies. The empirical results suggest that a one standard deviation increase of volatility lowers growth by up to 0.57 percentage points in a democracy, but raises growth by 1.74 percentage points in a total autocracy. These findings point to a crucial intermediating role of governments in the relationship between volatility and growth. Both the size of the public sector and the regime form assume key roles

Terrorism and the Media

This paper systematically analyzes media attention devoted to terrorist attacks worldwide between 1998 and 2012. Several aspects are related to predicting media attention. First, suicide missions receive significantly more coverage, which could explain their increased popularity among terrorist groups. This result is further supported by Oaxaca-Blinder decompositions, suggesting that it is not the particular characteristics of suicide attacks (e.g., more casualties) that are driving heightened media attention. Second, less attention is devoted to attacks in countries located further away from the US. Third, acts of terror in countries governed by leftist administrations draw more coverage. However, this finding is not confirmed for suicide attacks conducted in countries ruled by leftist administrations. Fourth, the more a country trades with the US, the more media coverage an attack in that country receives. Finally, media attention of any terror attack is both predictive of the likelihood of another strike in the affected country within seven days' time and of a reduced interval until the next attack

Terrorism and the Media: The Effect of US Television Coverage on Al-Qaeda Attacks

Can media coverage of a terrorist organization encourage their execution of further attacks? This paper analyzes the day-to-day news coverage of Al-Qaeda on US television since 9/11 and the group's terrorist strikes. To isolate causality, I use disaster deaths worldwide as an exogenous variation that crowds out Al-Qaeda coverage in an instrumental variable framework. The results suggest a positive and statistically powerful effect of CNN, NBC, CBS, and Fox News coverage on subsequent Al-Qaeda attacks. This result is robust to a battery of alternative estimations, extensions, and placebo regressions. One minute of Al-Qaeda coverage in a 30-minute news segment causes approximately one attack in the upcoming week, equivalent to 4.9 casualties, on average

Volatility and Growth: An Explanation for the Disagreement

This paper reconsiders the e_ects of volatile growth rates on growth itself. I show that the underlying endogeneity of government size can hide the net growth e_ects from volatility. There exists a positive direct and a negative indirect channel, with the latter operating through the size of the public sector. Risk-averse citizens respond to volatility either with precautionary savings (direct e_ect) or by demanding a stronger public safety net, which in turn lowers growth (indirect e_ect). However, the indirect channel is only available if the political regime allows citizens to determine their desired level of public services. I test this theory on a balanced panel of 95 countries from 1960 { 2010. The paper reveals the latent endogeneity of government size in a single growth equation framework and o_ers a simultaneous estimation method as an alternative. Results support the existence of both effects. The direct channel is stronger in autocratic societies, but as a country turns to democracy the indirect channel dominates. Volatility has a positive net e_ect on growth in autocratic nations, but a negative net effect in democratic societies. This finding explains why previous growth analyses of volatility at times reached contradicting conclusions

Three Essays in Economics

My dissertation consist of three essays analyzing the results of decisions made by workers, both on the microeconomic as well as the macroeconomic level.My first essay, which is a coproduction with Wayne Grove and Andrew Hussey, investigates the determinants of the gender wage gap. Specifically, the paper points out that noncognitive skills, preferences for life and career, but also preferences for work ethics and work environment, are able to account for as much as one third of the explained portion of the gender wage gap.My second essay, which is co-authored with Dr. Pinaki Bose, provides a possible explanation why some tax amnesties are successful in terms of revenuecollection and participation rates (for example Ireland, Colombia, India twice, and France), whereas others are not. In particular, I am modeling the taxpayer\u27s decision whether to acceptan amnesty offer from the tax authority and derive conditions under which she will be inclined to do so. The resultsshow that if economic conditions change substantially, for example by a tradeliberalization of the domestic country, a perfectly rational agent will find itoptimal to accept a tax amnesty.In my third essay, I am developing a theoretical model identifying the relationship between the volatility of private sector wages and growth. The model suggests two distinct channels in which wage volatility affects growth: a positive direct way (working through precautionary savings) and a negative indirect way (working through the mediating role of government size). Applying a 3SLS approach to a panel of 19 countries, my empirical analysis provides strong evidence for the existence of both effects. Thus, this paper establishes wage volatility as a growth determinant and explains why previous growth analyses on other sorts of volatility could not reach a consensus, as the indirect effect was not recognized

Long Term Trends in Fair and Unfair Inequality in the United States

This paper analyzes the microeconomic sources of wage inequality in the United States from 1967-2012. Decomposing inequality into factors categorized by degree of personal responsibility, we find that education is able to explain more than twice as much of inequality today as 45 years ago. However, neither hours worked nor education, industry, marital status, or geographical location is able to explain the observed general rise in inequality. In fact, "unfair" inequality has risen faster than "fair" inequality, regardless of the set of variables chosen as fair sources of inequality (resulting from responsibility factors). We also examine inequalities within gender and racial groups and across U.S. states. Several noteworthy findings emerge. Wage inequality among males used to be lower than among females until 1990, but today the opposite is true. We also find several occasions where the distinction between the raw Gini and the Gini adjusted for certain characteristics produces different conclusions. For instance, raw inequality among black females decreased since 1969, but if we acknowledge differences resulting from hours worked and educational outcomes as "fair" inequalities, the remaining inequality measure has increased. We also find that there is substantial geographic heterogeneity in trends of unfair and overall inequality

Terror Per Capita

Usually, studies analyzing terrorism focus on the total number of casualties or attacks in a given county. However, per capita rates of terrorism are more likely to matter for individual welfare. Analyzing 214 countries from 1970 - 2014, we show that three stylized findings are overturned in terms of sign, magnitude, and statistical significance when investigating terror per capita. Democracy, previously associated with more casualties, emerges as a marginally negative predictor of terror per capita. A larger share of Muslims in society is, if anything, associated with less terrorism. Similar conclusions apply to language fractionalization

Gender and Corruption: A Reassessment

This paper analyzes the relationship between gender and corruption, controlling for country-specific heterogeneity in a panel framework. Using annual observations in a pooled setting (no country-fixed effects) confirms the positive link between the involvement of women in society and the absence of corruption. However, once country-fixed effects are acknowledged, only the share of female employers remains a positive and statistically meaningful correlate. Nevertheless, the derived magnitude is negligible in a global sample. Analyzing potential nonlinearities reveals that this effect is driven by African nations, where a one standard deviation increase in the share of female employers is related to a substantial decrease of corruption by 2.5 index points (scale from zero to ten). Surprisingly, the link between the share of women in the labor force and the absence of corruption becomes negative once country unobservables are accounted for. Taken together, these findings cast doubt on a general, global relationship between gender and corruption

Game, set, and match: Do women and men perform differently in competitive situations?

This paper analyzes potential gender differences in competitive environments using a sample of over 100,000 professional tennis matches. Focusing on two phenomena of the labor and sports economics literature, we find robust evidence for (i) the hot-hand effect (an additional win in the most recent ten matches raises the likelihood of winning by 3.1 to 3.3 percent) and (ii) the clutch-player effect, as top players are excelling in Grand Slam tournaments, the most important events. Overall, we find virtually no gender differences for the hot-hand effect and only minor distinctions for the clutch-player effect