The
Global Impact of Terrorism on Economic Development
Abstract
The research objective that is addressed in the context of this study was to assess the scope and implications of global terrorism on economic development by way of testing the null hypothesis of “There is no global impact from terrorism on economic development” and the alternate hypothesis of “There is global impact from terrorism on economic development.” The research method that was employed for undertaking this study concerns the exploratory study to collect pertinent secondary data and suitable qualitative analysis. The key outcome of this study is that the relationship between terrorist attacks / incidents as well as economic development exists. This relationship, however, changes across the income groups. In this context, the hypothesis of the study is disapproved and confirms that terrorism impacts countries across many different ways and important one amongst them is adverse economic development.
Introduction
Terror as well as terrorism could result in
substantial levels of losses for any economy with respect to nations. The
losses shall chiefly be on account of the uncertainties which are brought in by
way of the confidence which is lost on account of terrorism as well as the transference
concerning significant portions pertaining to the resources of country towards
the military expenditure (Audu and Adam 2016; Huerta Barrientosa and Longoriaa
2016; Frey and Osterloh 2017). In the other end, terrorist could in addition target
in a direct manner critical sectors of the economics. The same leads to suggestions
that overall purposes concerning terrorism that aims in attaining the political
as well as economic demands over an illegitimate manner, represents the clear
as well as evident indications for a government in being intimidated as well as
create horror and fear within a society (Audu and Adam 2016; Huerta Barrientosa
and Longoriaa 2016; Frey and Osterloh 2017). In different terms, overall
purposes concerning terrorism lies in attaining specific political goal in the
manner of creating significant pressure over the political authorities as well
as affecting public interests by way of violence. In the manner described,
terrorism effectively creates horror as well as fear within the society, posing
an adverse threat across various domains, chiefly with respect to economy of a
nation. Hence, on account of deeper influence concerning terrorism over social
as well as political life concerning a country, then same in addition impacts
economic development in an adverse manner (Audu and Adam 2016; Huerta
Barrientosa and Longoriaa 2016; Frey and Osterloh 2017). The core reason with
respect to the targeting of an economy, overall situation of the economic
development shall be that it shall be highly critical indicator for success. In
actual, terrorist activities, irrespective of targeting towards the disruption of
macroeconomic stability across the nation, includes the economy, overall
successes concerning the activities lies in the formation of effective forms of
violence within the society (Audu and Adam 2016; Huerta Barrientosa and
Longoriaa 2016; Frey and Osterloh 2017).
The research objective that is addressed in
the context of this study was to assess the scope and implications of global
terrorism on economic development by way of testing the null hypothesis of
“There is no global impact from terrorism on economic development”
and the alternate hypothesis of “There is global impact from terrorism on
economic development.” The research method that was employed for
undertaking this study concerns the exploratory study to collect pertinent
secondary data and suitable qualitative analysis. The key outcome of this study
is that the relationship between terrorist attacks / incidents as well as
economic development exists. This relationship, however, changes across the
income groups. In this context, the hypothesis of the study is disapproved and
confirms that terrorism impacts countries across many different ways and
important one amongst them is adverse economic development.
Literature Review
Terrorism: A Background
Terrorism refers to pre-meditated form of
threats to utilize violence, or else, use violence by sub-national groups or individuals
for attaining any social or else political objectives by way of intimidation over
large set of audience, over and above the immediate victims (LaFree et al.
2014; Audu and Adam 2016; Huerta Barrientosa and Longoriaa 2016). However even
if overall motivation of the terrorists could vary, their respective actions shall
follow standard and common patterns in terms of terrorist incidents representing
varied different forms like that of kidnappings, airplane hijackings, threats, assassinations,
suicide attacks, and, bombings. The terrorist attacks shall be intended for
applying adequate pressures over the relevant government such that the said
government shall grant the specific political concession that is sought. In
case the government which is besieged notes these anticipated costs concerning
future actions of terrorists to be greater as compared to costs from conceding the
demands of the terrorists, then the government may make certain accommodation (LaFree
et al. 2014; Audu and Adam 2016; Huerta Barrientosa and Longoriaa 2016). Hence,
the rational form of terrorist organization could, at the principle level, attain
the goals faster if the same shall possess the ability for augmenting the
overall consequences concerning the said campaign. The various consequences could
hold various forms inclusive of casualties; buildings destroyed, heightened
levels of anxiety, as well as varied set of economic costs (LaFree et al. 2014;
Audu and Adam 2016; Huerta Barrientosa and Longoriaa 2016). In an evident
manner, overall attacks during 11th September, 2001 (“9 / 11”) in
United Stated possessed significant levels of costs which had been later
estimated in being between the ranges of Us Dollar 80 Billion and US Dollar 90
billion inclusive of the ensuing economic / financial losses by way if reduced
levels of commercial activities, compensations to the workmen, lost wages, etc.
(LaFree et al. 2014; Audu and Adam 2016; Huerta Barrientosa and Longoriaa 2016).
Terrorism: Different Forms
Terrorism shall come about as two critical forms
– transnational as well as domestic (Strang and Alamieyeseigha 2015; Petkova et
al. 2017; Frey and Osterloh 2017). The domestic terrorism can be stated to be
homegrown having consequences over concerned host nations solely, the
affiliated institutions, property, citizens, policies, etc. The transnational
terrorism shall comprise more than a single nation (Strang and Alamieyeseigha
2015; Petkova et al. 2017; Frey and Osterloh 2017). The underlying
international aspect could arise from the targets, victims, supporters, institutions,
implications or else terrorists. To take an example, 9 / 11 attack represents transnational
form of terrorist event as the impacted victims had been from numerous and diverse
nations, overall mission being financed as well as planned in the foreign
location, terrorists themselves being foreigners, as well as the overall
implications concerning this event in terms of security, financial aspects,
etc. were of global nature (Strang and Alamieyeseigha 2015; Petkova et al.
2017; Frey and Osterloh 2017). The hijacking which shall originate from one nation
and yet ends in the different nations represents the example for transnational
terrorism and so shall be the assassinations undertaken for political motives
concerning the foreigner in the city streets. The transnational form of terrorist
attacks usually encompass trans-boundary externalities, that is, authorities or
else actions from one nation imposing the uncompensated form of consequences over
property, person, etc. in different country. Hence, the spillover costs could ensure
such that overall economic impacts from the terrorist events could transcend concerned
host nation (Strang and Alamieyeseigha 2015; Petkova et al. 2017; Frey and
Osterloh 2017). The attacks over World Trade Center building during the 9 / 11 attack
led to the killing of numerous British nationals as well as led to
ramifications with respect to United Kingdom based financial institutions. Studies
have illustrated that 9 / 11 attacks influenced negatively the average returns in
stock markets across the globe (Strang and Alamieyeseigha 2015; Petkova et al.
2017; Frey and Osterloh 2017). In actual, eleven days cumulative level average
of abnormal returns was larger in Hong Kong, Italy, Switzerland, Amsterdam,
Toronto, Paris, Frankfurt, and London stock markets as compared to New York
Stock Exchange post 9 / 11 attacks (Strang and Alamieyeseigha 2015; Petkova et
al. 2017; Frey and Osterloh 2017).
Terrorism: Economic Consequences
Terrorism could lead to the imposition of
costs over the targeted nations by way of varied different set of avenues (Bueno
Solano and Cedillo Campos 2014; Enders et al. 2016; Estrada et al. 2015). The incidents
of terrorism possess economic consequences in the form of diverting the foreign
direct investments (“FDI”), destruction of infrastructure, re-direction of the
public investment related funds towards security, or else, adversely affecting
trade (Bueno Solano and Cedillo Campos 2014; Enders et al. 2016; Estrada et al.
2015). In case of the developing nations the loss in the form of FDI reduction can
lead to reduction in the economic growth as FDI represents key source for
savings in these nations. In the same manner as external capital may takes
flight from the nation that is plagued with civil wars, the intense form of
terrorist campaigns to the sufficient extent could significantly bring down the
capital inflows (Bueno Solano and Cedillo Campos 2014; Enders et al. 2016;
Estrada et al. 2015). In essence, terrorism akin to the civil conflicts could result
in the spillover costs amongst the nations neighboring with the terrorist
campaigns across the neighbor lead to the dissuasion of the capital inflow, or else,
the regional multiplier impacts lead to lost economic activities with respect
to the terrorism ridden nation in resonating all through the specific region (Bueno
Solano and Cedillo Campos 2014; Enders et al. 2016; Estrada et al. 2015). In certain
cases, terrorism could affect specific nations akin to 9 / 11 did across the
airline sector as well as the tourism sectors. The other costs concerns the
expensive forms of security measures which need to be suitably instituted post
the larger attacks like for example massive outlays of homeland security post
the 9 / 11 attacks (Bueno Solano and Cedillo Campos 2014; Enders et al. 2016;
Estrada et al. 2015). In addition, terrorism raises overall costs for undertaking
business operations with respect to higher levels of premiums on insurance,
security precautions that are expensive and increase costs, as well as increase
in salaries for the employees at risk (Bueno Solano and Cedillo Campos 2014;
Enders et al. 2016; Estrada et al. 2015).
The overall size as well as diversity concerning
any specific economy has much to be linked with overall ability of the specific
country in withstanding the attacks from terrorist without facing any
significant forms of economic impacts (Snarr and Snarr 2016; Bilgel and
Karahasan 2017). For example, the shipping industry at Yemen suffered to a
great extent post attacks from the terrorist over USS Cole as well as Limburg had
diverted about half of the port activities from Yemen to the other various facilities
that are competitive across Oman and Djibouti on account of 300 per cent
increase with respect to the premiums on insurance. In the highly developed as
well as diversified economy, the losses of these forms could have influences
that are temporary on account of the fact that resources get re-allocated towards
other various sectors or else effective forms of security measures shall be
deployed for purposes of allaying the concerns (Snarr and Snarr 2016; Bilgel
and Karahasan 2017). In addition, developed economies possess effective forms
of fiscal as well as monetary capabilities for limiting the macroeconomic
impacts from terrorist attacks as compared to the small sized developing nations
(Snarr and Snarr 2016; Bilgel and Karahasan 2017). Hence, one needs to
anticipate that the developed nations shall be highly likely for displaying the
reactions that are sector specific towards the terrorist attacks, whilst the
developing nations shall be apt for exhibiting certain macroeconomic level
consequences with respect to specific vicious attacks or else the sustained
form of terror campaigns (Snarr and Snarr 2016; Bilgel and Karahasan 2017).
It is noted that there seem to be significant
levels of cost distinctions which could be brought about with respect to terrorism
related losses (Efobi and Asongu 2016; Serneels and Verpoorten 2015). To take
an instance, direct costs comprise the immediate form of losses affiliated with
the terrorist campaigns / attacks as well as comprise the damaged goods, overall
value concerning lost lives, various costs affiliated to the injuries and lost wages, structures destructed,
infrastructure demolished, as well as reduction in the shorter term commercial
activities (Efobi and Asongu 2016; Serneels and Verpoorten 2015). In converse,
secondary or else indirect costs concerning terrorist attack affiliated consequent
losses, like that of increase in premiums over insurance, increase in the
security costs, increased compensation for those in the higher risk locations,
as well as costs linked longer run changes resulting from terrorist attacks
over the commercial activities (Efobi and Asongu 2016; Serneels and Verpoorten
2015). The indirect forms of costs shall surface in the manner of reduction in growth
over the gross domestic product (“GDP”), FDI lost, changes with respect to
inflation, or else the increases in unemployment. Suitable judgment shall be required
to be undertaken with respect to the ways in which it can be distinguished
between the indirect as well as direct costs, over which any of the distinction
shall strike certain researchers in being arbitrary (Efobi and Asongu 2016;
Serneels and Verpoorten 2015).
To the fortunate extent, the said
distinction shall not be actually essential for characterizing the various
economic impacts over terrorism, that could be represented with respect to certain
macroeconomic variables like per capita form of GDP growth that is well-defined
or else the microeconomic variables like reduction in the tourism affiliated
income receipts (Efobi and Asongu 2016; Serneels and Verpoorten 2015). These
various variables shall represent consequences from terrorism with respect to
sector level or else aggregate activities. If the output is lost, damaged
infrastructure as well as casualties shall be to at the sufficient extent
large, and they shall impact the productive capacity of concerned economy in
terms of microeconomic level and / or macroeconomic level repercussions (Efobi
and Asongu 2016; Serneels and Verpoorten 2015). This identification of the
impacts shall be of wider significance as compared to just tally or aggregate
the losses in case policy is for ameliorating concerned economic ramifications with
respect to terrorism (Efobi and Asongu 2016; Serneels and Verpoorten 2015).
In contrast to this, in case of the
domestic terrorist incidents, both the perpetrators as well as the victims shall
be from host nation. The bombing in the Oklahoma City during 19th April,
1995 represents an event of domestic terrorism similar to that of kidnapping concerning
Parliament members by the Colombian terrorists (Efobi and Asongu 2016; Serneels
and Verpoorten 2015). Various ethno-nationalism conflicts like that of the
Tamil Tigers in Sri Lanka can be stated to be affiliated with the highly
domestic form of terrorism, unless rebels shall aim in targeting citizens coming
from other nations for publicizing their respective causes to larger world. The
domestic events shall seem to outnumber the transnational terrorist acts by 8
to 1 (Efobi and Asongu 2016; Serneels and Verpoorten 2015).
Theory & Hypotheses
In the context of the literature review
outcomes, the research question which shall be addressed in the context of this
study shall be to assess what are the scope and implications of global
terrorism on economic development.
In terms of theoretical basis that underlie
this research context and objective, the same can be linked to the following
frameworks / theoretical notions –
- Terrorism can be rooted within
relative forms of economic deprivation that shall manifests itself like in case
of inequality within a country, poverty as well as the deficient / absent
economic opportunities, wherein the violence shall be generated while there are
noted discrepancy amongst what the individuals shall think in they deserving as
well as what they shall receive actually over the course in the distributive /
economic processes (Elbakidze & Jin 2015; Ghatak & Gold 2017; Mohan and
Sinha 2016). Deficient forms of structural economic circumstances lead to
frustration and the same in consequence makes violence in becoming highly
likely (Elbakidze & Jin 2015; Ghatak & Gold 2017; Mohan and Sinha 2016).
Across the environments wherein relative forms of economic deprivation are
noted, terrorist organizations shall find it to be much easier / less costly in
recruiting followers who are frustrated or else receive funding amongst its
supporters (Elbakidze & Jin 2015; Ghatak & Gold 2017; Mohan and Sinha
2016). The overall absence of economic activities of non-violent could in
addition fill in ranks concerning terrorist organizations in the manner of
reducing overall opportunity costs concerning violence (Elbakidze & Jin
2015; Ghatak & Gold 2017; Mohan and Sinha 2016). - The overall roles concerning
socio-economic changes in the longer run conditions of socio-economic factors
also have link to terrorism (Pavlakovich Kochi and Morehouse 2017; David et al.
2015; Mutisya et al. 2018). It is argued that the terrorism and its affiliated
activities shall be fostered using a process comprising modernization that
shall create varied forms of strains like for example the economic changes,
newer ideas akin to western cultural / ideological impacts in the Islamic
nations as well as the newer forms concerning living in terms of shifting from
the agricultural societies to that of urban societies (Pavlakovich Kochi and
Morehouse 2017; David et al. 2015; Mutisya et al. 2018). Each of the factors
stated could lead to grievances that are affiliated with the social,
demographic, as well as economic strains (Pavlakovich Kochi and Morehouse 2017;
David et al. 2015; Mutisya et al. 2018). - The political as well as
institutional order has also been identified in being connected towards
terrorism (Pavlakovich Kochi and Morehouse 2017; David et al. 2015; Mutisya et
al. 2018). There are academic debates that are ongoing over the question that
can specific system of political ideology like that of autocratic or else democratic
regime shall be highly prepared for dealing with terrorism. Whilst the former could
provide non-violent approach for voicing the dissent, the same in addition
shall be constrained by the inherent efforts for the purposes of realize harder
approaches to counter-terrorism like the basis for civil liberties being
protected. The latter could capitalize over the inherent capability over harder
repressions and yet could at same instance in addition generate grievances affiliated
with the political disenfranchisement. - Political transformation as
well as political instabilities shall in addition at times be considered in
being the causes for terrorism and in specific within the popular discourses (Frieden
and Lake 2015; Ezcurra and Palacios 2016; Mac Ginty and Richmond 2016). The
said view proposes argument that the political changes in addition shall
matters towards terrorism irrespective of longer run conditions of politics (Frieden
and Lake 2015; Ezcurra and Palacios 2016; Mac Ginty and Richmond 2016). The changes
with respect to political systems shall lead to political vacuums and the same
shall be leveraged / capitalized by the terrorist groups for pushing their
respective agendas (Frieden and Lake 2015; Ezcurra and Palacios 2016; Mac Ginty
and Richmond 2016). - Economic as well as political
integration have been linked with terrorism (Campos et al. 2014; Rauf et al.
2016; Baylis et al. 2017). In one end, this standpoint essentially transfers overall
idea of terrorism being rooted within the socio-economic changes as well as
affiliated conditions towards the global contexts (Campos et al. 2014; Rauf et
al. 2016; Baylis et al. 2017). It means that in cases individuals shall be
incited on account of the prevailing global orders, that is, global
distribution concerning wealth which shall be perceived in being unfair, the
same shall become easier with terrorist organizations for finding support in
the manner building over the affiliated grievances (Campos et al. 2014; Rauf et
al. 2016; Baylis et al. 2017).
Hypotheses
H0 Null Hypothesis: There is no global impact from terrorism on economic development
H1 Alternate Hypothesis: There is global impact from terrorism on economic development
Research Design & Data
Research Design
In terms of the research aim to assess what
are the scope and implications of global terrorism on economic development by
way of testing the null hypothesis of “There is no global impact from
terrorism on economic development” and the alternate hypothesis of
“There is global impact from terrorism on economic development”, it
is evident that the research undertakes a deductive approach.
On account of the significant literature
that is available in the context of this research context as well as in
alignment to the research scope and objectives, the research shall be
exploratory in nature employing secondary data to validate the hypotheses.
Research Methods & Data Collection
The specific research method that shall be
employed for undertaking this study concerns the exploratory study to collect
pertinent secondary data. The same shall encompass the identification of all
critical literature that are relevant to the study and would have evaluated the
relationship between terrorism and economic development in the global context.
The findings so collected shall be
assessed, reviewed and suitable validation
of the hypothesis shall be undertaken by way of comprehensive, critical
and relevant qualitative analysis.
Research Plan
Findings & Analysis
Ak et al. (2015) undertook a study of
theoretical which effectively summarize various literature examining the
overall relationship amongst terrorism as well as economic growth. The outcome
of this theoretical study indicates that Ak et al. (2015) have attained
conclusion in terms of there being inverse form of relationship amongst
literature concerning terror as well as economic growth. While the earlier examinations
of empirical literature were undertaken, it had been noted that the empirical
form of studies had in general employed two of the econometric methods. Certain
earlier articles assessed and presented as follow also examine terrorism as
well as the ensuing economic reflections.
- The initial econometric
approach was reliant over studies which employ time series form of data
analysis. The said approach undertakes the examination of various time periods across
different nations. Abadie & Gardeazabal (2003) undertook examination of overall
relationship amongst terrorism as well as Gross National Product (“GNP”) across
the Basque nations. The findings presented by Abadie & Gardeazabal (2003)
illustrate that post outbreak concerning terrorism during the later periods of 60s,
the per capita level GDP across the Basque nations had declined to the extent
of ten per cent when compared with the synthetic form of control region that
has terrorism during period between 80’s and 90s. - Gupta et al. (2004) undertook
the examination of the overall impacts from armed conflicts as well as
terrorism over lower income nations as well as middle income nations. The outcome
illustrates that in case there are armed conflicts within the nations, lower
levels of growth as well as higher levels of inflation could be noted, leading
to adverse forms of impacts over tax revenues as well as the investments. - Further Tavares (2004) undertook
systematic form of investigation concerning the overall incidence as well as
economic costs pertaining to terrorist attacks in the level of countries. It
was determined that the richer nations seem to be highly perceptible in suffering
from the attacks whilst their respective democracies turned to be, if anything
else, lesser vulnerable as compared to other nations. In addition, one of the study
quoted by Tavares (2004) and undertaken at World Bank makes an estimation that
4 per cent of decline in GDP across Israeli economy whilst Palestinian
territories had suffered about 50 per cent decline between years 1994 and 2002.
Gries et al. (2011) undertook study with an
objective for identifying overall links amongst intensity concerning the
domestic level terrorism as well as overall rates concerning per capita level
real GDP growth with respect to Western European nations. It was determined
that the economic performances results in terrorist violence over robust manner
solely for three in about seven nations. The findings made indicates that overall
role played by economic performance over the determination of terrorist
violence seem to have become significant for certain nations, whilst all of the
attacked economies had been highly successful to adapt towards the threats from
terrorism. By way of employing time series assesments, certain studies with
respect to Turkey can be presented in the following manner –
- Uysal et al. (2009) had made a
conclusion that there are negatively impacts from terrorism over economic
growth during the period between 1992 and 2001. - As per Sezgin (2003) who
examined the spending on defense, economy as well as terrorism, overall stability
and security across nations forms the key requirement with respect to economic
development. In essence, there seem to be two different options with respect to
government refraining from the terrorism acts. They could either increase overall
spending ion defense or else spending on health and education for the purposes
of upgrading overall welfare concerning people who may be affiliated with the
terrorist acts. - Yıldırım & Ocal (2013)
undertake investigation over determinants concerning provincial terrorism across
Turkey considering spatial dimension as part of assessment over time period between
1990 and 2006. The results illustrates the increases with respect to income as
well as schooling ratios seeming to bring down overall provincial level average
for terrorism, while the increase with respect to unemployment actually enhances
the same.
Blomberg et al. (2004) undertake study
aided by empirical investigations over macroeconomic consequences concerning
the international terrorism as well as the interactions amongst the alternate modes
of the collective violence. The analysis undertaken by Blomberg et al. (2004)
is on the basis of a rich and unbalanced set of panel data aided by annual
level observations across 177 different nations between the year 1968 and 2000.
Blomberg et al. (2004) have determined that on the average levels, overall
incidence concerning terrorism could possess economic form of negative effects
of significant extent over growth, though one that shall be smaller as well as
less persistent to the considerable extent as compared to affiliated with
either internal conflicts or else external wars. Gaibulloev & Sandler (2009)
undertook the examination of overall impacts concerning terrorism with respect
to economic growth across Asia between the periods of 1970 and 2004. The
estimations of panel data illustrate that the attacks by transnational
terrorist possess significant impacts over growth. In different terms,
Gaibulloev & Sandler (2009) illustrate that additional incidents of
terrorism for each million persons brings down the per capita level GDP growth to
the extent of 1.5 per cent. The said impacts, however, shall be varied amongst
the developed as well as the developing Asian nations. In specific with respect
to developing Asian nations, the transnational form of terrorism adversely
impacts per capita level income growth primarily on account of governments
stimulating the security spending and the same diverting the resources away from
highly productive public / private investments.
Meierrieks & Gries (2012) undertake investigation
of overall relationship amongst the economic performance concerning nations as
well as terrorism across eighteen different Latin American nations between the
year1970 and 2007. It was determined by Meierrieks & Gries (2012) that overall
link amongst terrorism as well as economic growth shall be different as per the
overall development concerning the nations. In different terms, terrorism shall
reduce overall growth with respect to lesser developed nations and yet the said
connection shall never be noted across developed Latin American nation economies.
Akıncı et al. (2014) employed data from 152
different nations between the periods of 2002 and 2011, comprising of 30 under
developed nations, 77 emerging nations and, 45 advanced nations made with two stages
of the least square assessments. As per the results / outcome, Akıncı et al.
(2014) noted that terrorist attacks across the three different groups of nations
are actually disrupting overall process of growth in the manner of raising
inflation level. In different terms, the terrorist attacks shall affect in a
negative manner over the inflation growth. The said effect, however, shall be
much stronger across the developing as well as the underdeveloped nations.
Younas (2015) undertook investigation to see if international openness leads to
the limitation of negative impacts concerning terrorism with respect to
economic growth. This analysis laid emphasis over 120 different nations across a
period between 1976 and 2008. The study’s findings illustrate that positive
forms of interactions impacting the terrorism as well as globalization indicates
that latter shall ameliorate overall adverse impacts pertaining to former over
growth. The same thus aids in explaining the basis begin growth consequences emanating
from terrorism differs from nation to nation as well as hold significant
implications over policies.
Bezic et al. (2016) undertook examination
of the impacts from terrorism over FDI across selective European Union (“EU”) as
well as European Economic Area (“EEA”) nations. Bezic et al. (2016) employed
dynamic form of panel data approach with respect to 29 different nations between
the years 2000 and 2013. The outcome of the study indicates that the activities
terrorism reduced the overall confidence as well as security amongst the
investors across nations facing terrorist activities, adversely impacting
overall inflows concerning FDI. The various results illustrate that negative
form of indirect relationship exists amongst the terrorist activities as well
as economy.
Musayev (2016) undertook investigation over
potential sources concerning positive form of externalities concerning overall
relationship amongst the military spending as well as economic growth by
employing recent set of advances with respect to estimation methods concerning
panel data as well as larger data set concerning military expenditure. In
essence, the outcomes illustrate that overall impacts concerning military
expenditure with respect to growth shall
in general be negative and yet not be
detrimental in a significant manner over the nations that face higher levels of
internal threats as well as with respect to nations possessing larger wealth in
terms of natural resource once the levels of corruption have been suitably
accounted.
Conclusion
As terrorism could aid various purposes, the
same is causing significant damage to various nations in varied different ways.
In the study undertaken, the overall impacts with respect to economic development
across many of the nations on account of the terrorist incidents were examined
by using an exploratory study.
The key outcome of this study is that the relationship
between terrorist attacks / incidents as well as economic development exists. This
relationship, however, changes across the income groups. In this context, the
hypothesis of the study is disapproved and confirms that terrorism impacts
countries across many different ways and important one amongst them is adverse
economic development. In actual, the reversal of the effect could act in being
antidote towards overall reduction concerning the terrorist incidents. Various nations
like that of Turkey are forced / preferred in having military combats to be
direct methods for tackling terrorism. This approach, however, enhances the
overall problem in course of time rather than reducing the same. It is proposed
in this context that economic growth should be used as the indirect form of
instrument in combating terrorism.
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