Al Qaeda at the bar: coordinating ideologues and mercenaries in terrorist organizations

Most terrorist groups have limited lifespans. A number of scholars and casual observers have noted that terrorist organizations often are comprised of two types of participants: ideologues or "true believers" dedicated to the group's cause, and mercenaries, who are adept at raising money through illegal means. The latter are interested primarily in their personal gains and have relatively little ideological commitment. Terrorist groups need both participants in order to function effectively. The purpose of the study is to understand the impact of communication on the compositions of terrorist groups. Three experimental treatments consider a coordination problem, and focus on the behavior of the mercenaries. Participants choose whether or not to participate in a terrorist attack. Payoffs are U-shaped in the number of participants, and increase with the number of successful attacks. The treatments allow communication between a leader and frontline fighters ("leader" treatment) or among the frontline fighters themselves ("communication" treatment). In the first treatment, a group leader can post messages to the members, which has a 19 % coordination success rate. For the communication treatment, all participants can post messages anonymously to each other, which yields a 27 % coordination success rate. By contrast, the baseline ("no communication" treatment) shows a success rate of 11 %. We conclude from our experimental evidence that disrupting communications among the frontline fighters is more effective in terminating terrorist organizations

How Terrorism Explains Capital Flight from Africa

We assess the effects of terrorism on capital flight in a panel of 29 African countries for which data is available for the period 1987-2008. The terrorism dynamics entail domestic, transnational, unclear and total terrorisms. The empirical evidence is based on Generalised Method of Moments (GMM) with forward orthogonal deviations and Quantile regressions (QR). The following findings are established. First, for GMM, domestic, unclear and total terrorisms consistently increase capital flight, with the magnitude relative higher from unclear terrorism. Second, for QR: (i) the effect of transnational terrorism is now positively significant in the top quantiles (0.75th and 0.90th) of the capital flight distribution, (ii) domestic and total terrorisms are also significant in the top quantiles and (iii) unclear terrorism is significant in the 0.10th and 0.75th quantiles. Policy implications are discussed

Defence and Peace Economics: The Third Decade in Retrospect

Keeping with the established tradition in our journal, this paper reviews and surveys the last decade, that is volumes 21–30. It offers an overview of the thematic coverage of the papers published in Defence and Peace Economics and the changes that have occurred, points to existing gaps in the defence economics literature and possible future directions in the research agenda of this growing and vibrant field. © 2020, © 2020 Informa UK Limited, trading as Taylor & Francis Group

The effect of capital inflows on the imports of capital goods in developing countries

Data availability: Data will be made available on request.This paper examines the relationship between capital inflows and import of capital goods to credit-constrained industries in developing countries. Using data of 11 industrial sectors in 57 countries for 2000–2020, we find that financially dependent industries import disproportionately more capital goods if they operate in countries that receive more foreign funds. A host of robustness tests, including instrumental variables estimation, confirm our main finding. We also document that: (i) the established nexus breaks down during the global financial crisis, (ii) the observed relationship is mainly due to the direct investment via equity, and (iii) host countries tend to import relatively more capital goods from G7 economies. Overall, our results suggest that one channel through which capital inflows affect economic growth is by alleviating firms' financial constraints, thereby enabling firms to acquire more advanced capital goods.American University of Sharjah research grant [FRG20-M-B62]

Financial Uncertainty in Germany and its Impact on Western European Terrorism

This paper analyses the link between the VDAX as a proxy for European financial uncertainty and the number of terror incidents in Western Europe. Considering data of the Global Terrorism Database, the number of terror incidents does - on average - not affect financial uncertainty. In contrast, based on a behavioral model of terrorism motivated by Schmid and de Graaf (1982), lagged financial uncertainty contains information for the risk of terror events. Estimation results of the negative binominal quasi maximum likelihood count data model confirm an inverse impact of lagged financial uncertainty on terrorism. Furthermore, empirical evidence leads to the conclusion of average lead time for terror incidents of 6 month. These results are potentially important for terror prevention.Dieses Papier untersucht den Zusammenhang zwischen dem VDAX als Proxy für europäische Finanzmarktunsicherheit und der Anzahl von Terroranschlägen in Westeuropa. Unter Berücksichtigung von Daten der Datenbank Global Terrorism Database kann gezeigt werden, dass - im Durchschnitt - Terrorismus keinen Effekt auf die Finanzmarktunsicherheit hat. Ausgehend von einem terroristischen Verhaltensmodell, welches von Schmid und de Graaf (1982) motiviert wird, kann gezeigt werden, dass verzögerte Finanzmarktunsicherheit Informationen für das Risiko von Terroranschlägen enthält. Schätzergebnisse eines effizienten Zähldatenmodells bestätigen einen reziproken Zusammenhang zwischen verzögerter Finanzmarktunsicherheit und Ausmaß des Terrorismus. Empirische Resultate implizieren darüber hinaus eine durchschnittlich sechsmonatige Vorbereitungszeit für einen Terroranschlag. Die Ergebnisse dieses Papiers sind möglicherweise relevant für die Prävention von Terroranschlägen