This paper evaluates the effect of development project aid from the World Bank and China on firms' sales growth, using a large dataset of 110864 firms, spanning 121 countries between 2001 and 2016. We find that, contrary to the World Bank, Chinese ODA projects increase, on average, firm sales and, compared to sector-specific, Chinese region-specific aid positively affect firm performance. Finally, we show that the positive effect of Chinese aid is stronger for firms lacking transport infrastructure (and with better electricity provision), suggesting that aid may improve firm performance by releasing their infrastructure constraints.
{"title":"Project Aid and Firm Performance","authors":"S. Marchesi, T. Masi, S. Paul","doi":"10.2139/ssrn.3921495","DOIUrl":"https://doi.org/10.2139/ssrn.3921495","url":null,"abstract":"This paper evaluates the effect of development project aid from the World Bank and China on firms' sales growth, using a large dataset of 110864 firms, spanning 121 countries between 2001 and 2016. We find that, contrary to the World Bank, Chinese ODA projects increase, on average, firm sales and, compared to sector-specific, Chinese region-specific aid positively affect firm performance. Finally, we show that the positive effect of Chinese aid is stronger for firms lacking transport infrastructure (and with better electricity provision), suggesting that aid may improve firm performance by releasing their infrastructure constraints.","PeriodicalId":415063,"journal":{"name":"University of Milan Bicocca Department of Economics","volume":"117 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2021-09-02","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"124203421","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This study investigates the relationship between outward Foreign Direct Investment (FDI) and the performance of Chinese enterprises. Using firm-level panel data over the period 2008–2014, we introduce a taxonomy of outward FDI that accounts for the decision to invest abroad and the location of foreign affiliates. Through different specifications, we show systematic differences in performance between FDI starters and non-starters two years before and two years after the first investment by the starters. This fact points to the existence of strong ex-ante and ex-post effects of Chinese outward FDI. On one hand, we provide evidence—so far not present in the literature—that the best performing Chinese firms self-select into outward FDI. On the other hand, controlling for endogeneity through propensity score matching (PSM) techniques, we detect significant learning effects from outward FDI to firm-level performance. Interestingly, these effects are heterogeneous with respect to destination, with deeper learning for Chinese enterprises investing in Asia.
{"title":"Estimating the Ex-ante and the Ex-post Effects of Chinese Outward FDI","authors":"D. Baiardi, V. Gattai, Piergiovanna Natale","doi":"10.1111/TWEC.13161","DOIUrl":"https://doi.org/10.1111/TWEC.13161","url":null,"abstract":"This study investigates the relationship between outward Foreign Direct Investment (FDI) and the performance of Chinese enterprises. Using firm-level panel data over the period 2008–2014, we introduce a taxonomy of outward FDI that accounts for the decision to invest abroad and the location of foreign affiliates. Through different specifications, we show systematic differences in performance between FDI starters and non-starters two years before and two years after the first investment by the starters. This fact points to the existence of strong ex-ante and ex-post effects of Chinese outward FDI. On one hand, we provide evidence—so far not present in the literature—that the best performing Chinese firms self-select into outward FDI. On the other hand, controlling for endogeneity through propensity score matching (PSM) techniques, we detect significant learning effects from outward FDI to firm-level performance. Interestingly, these effects are heterogeneous with respect to destination, with deeper learning for Chinese enterprises investing in Asia.","PeriodicalId":415063,"journal":{"name":"University of Milan Bicocca Department of Economics","volume":"24 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2021-05-31","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"133054046","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Despite the prominent role played by bibliometric indicators for evaluating research, progress in pinning down the determinants of citation ows has so far been hindered by endogeneity issues. Based on 30 years of bibliometric data, we exploit a Regression Discontinuity Design to causally identify the effects that an article featured on the cover of the journal Nature has on citations to all articles by its authors. We confirm that, over time, cover articles are cited significantly more than non-cover articles, with this difference being long-lasting. However, when considering all articles by Nature authors, we find evidence of a crowding-out effect: the publication of a cover article causes citations to previous articles by its authors to decline sharply relative to citations to articles by non-cover authors.
{"title":"Cover Effects on Citations Uncovered: Evidence from Nature","authors":"P. Battiston, P. Sacco, L. Stanca","doi":"10.2139/ssrn.3474233","DOIUrl":"https://doi.org/10.2139/ssrn.3474233","url":null,"abstract":"Despite the prominent role played by bibliometric indicators for evaluating research, progress in pinning down the determinants of citation ows has so far been hindered by endogeneity issues. Based on 30 years of bibliometric data, we exploit a Regression Discontinuity Design to causally identify the effects that an article featured on the cover of the journal Nature has on citations to all articles by its authors. We confirm that, over time, cover articles are cited significantly more than non-cover articles, with this difference being long-lasting. However, when considering all articles by Nature authors, we find evidence of a crowding-out effect: the publication of a cover article causes citations to previous articles by its authors to decline sharply relative to citations to articles by non-cover authors.","PeriodicalId":415063,"journal":{"name":"University of Milan Bicocca Department of Economics","volume":"1 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2019-10-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"125343279","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
The aim of this paper is to investigate the links between lack of trust in ruling politicians and the functioning of a representative democracy. Within a standard principal-agent model of democracy, we show how lack of trust by citizens as reflected by passive beliefs updating may lead to the malfunctioning of representative democracy. We highlight how de facto accountability crucially depends on out-of-equilibrium beliefs, and that this is indeed descriptive of a substantive feature of public opinion that affects the functioning of democracy. Specifically, we show that effective accountability needs more than simple retrospective voting, as it requires voters to believe in the existence of good politicians that always choose according to voters’ interests, so that a deviation from bad policies can happen only because the leader is congruent. In this case, the unique equilibrium is an efficient one that maximizes voters’ welfare. However, if, on the other hand, the citizens share an overall lack of trust in ruling elites, then there is another inefficient equilibrium, where even the congruent politician behaves badly because of the adverse but rational voters’ behavior. This inefficient equilibrium does not depend on fake news or on distorted beliefs or, again, on voters’ heterogeneous preferences, since the voters' perfectly observe the quality of the policy implemented by the government, are fully rational and share the same interests. This result might contribute to explain the increasing negative perceptions on the working of democracy as due to a self-fulfilling equilibrium.
{"title":"Populism, the Backlash Against Ruling Politicians and the Possible Malfunctioning of Representative Democracy","authors":"M. Gilli, Elena Manzoni","doi":"10.2139/ssrn.3438897","DOIUrl":"https://doi.org/10.2139/ssrn.3438897","url":null,"abstract":"The aim of this paper is to investigate the links between lack of trust in ruling politicians and the functioning of a representative democracy. Within a standard principal-agent model of democracy, we show how lack of trust by citizens as reflected by passive beliefs updating may lead to the malfunctioning of representative democracy. We highlight how de facto accountability crucially depends on out-of-equilibrium beliefs, and that this is indeed descriptive of a substantive feature of public opinion that affects the functioning of democracy. Specifically, we show that effective accountability needs more than simple retrospective voting, as it requires voters to believe in the existence of good politicians that always choose according to voters’ interests, so that a deviation from bad policies can happen only because the leader is congruent. In this case, the unique equilibrium is an efficient one that maximizes voters’ welfare. However, if, on the other hand, the citizens share an overall lack of trust in ruling elites, then there is another inefficient equilibrium, where even the congruent politician behaves badly because of the adverse but rational voters’ behavior. This inefficient equilibrium does not depend on fake news or on distorted beliefs or, again, on voters’ heterogeneous preferences, since the voters' perfectly observe the quality of the policy implemented by the government, are fully rational and share the same interests. This result might contribute to explain the increasing negative perceptions on the working of democracy as due to a self-fulfilling equilibrium.","PeriodicalId":415063,"journal":{"name":"University of Milan Bicocca Department of Economics","volume":"8 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2019-08-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"128707547","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This paper contributes to the literature that aims at identifying and measuring the impact of social context on individual-level outcomes. We focus on religious congregations (social groups with which Christian worshipers feel associated) and investigate congregation effects on individual poverty using U.S. data and a multilevel approach. In order to correct for selection effects, we model congregation choice using a multinomial logit model and subsequently incorporate correction components into the multilevel model of congregation effects. Our empirical results support the existence of congregation effects and, therefore, the importance of social context on individual poverty. We find that congregation size, recreational services, initiatives to integrate new members and behavior standards play important roles in shaping the probability that churchgoers experience poverty. Individual behavior (in terms of participation in the religious life of congregations) also matters. These finding are in line with the idea that congregations’ activities can foster social interactions and cooperation reducing individual probability of experiencing poverty.
{"title":"Does Social Context Affect Poverty? The Role of Religious Congregations","authors":"A. Poggi","doi":"10.2139/ssrn.3398438","DOIUrl":"https://doi.org/10.2139/ssrn.3398438","url":null,"abstract":"This paper contributes to the literature that aims at identifying and measuring the impact of social context on individual-level outcomes. We focus on religious congregations (social groups with which Christian worshipers feel associated) and investigate congregation effects on individual poverty using U.S. data and a multilevel approach. In order to correct for selection effects, we model congregation choice using a multinomial logit model and subsequently incorporate correction components into the multilevel model of congregation effects. Our empirical results support the existence of congregation effects and, therefore, the importance of social context on individual poverty. We find that congregation size, recreational services, initiatives to integrate new members and behavior standards play important roles in shaping the probability that churchgoers experience poverty. Individual behavior (in terms of participation in the religious life of congregations) also matters. These finding are in line with the idea that congregations’ activities can foster social interactions and cooperation reducing individual probability of experiencing poverty.","PeriodicalId":415063,"journal":{"name":"University of Milan Bicocca Department of Economics","volume":"101 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2019-06-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"123230427","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
L. dalla Pellegrina, Giorgio Di Maio, P. Landoni, Beatrice Rama
This study is based on a randomized control trial (RCT) aimed at understanding the effectiveness of a financial literacy pilot program conducted in 2014-2016 at the Institute for Indian Mother and Child, a non-profit microfinance institution based near Kolkata. Significant impacts are revealed in terms of improvements in saving accumulation and punctuality in the repayment of the loan instalments for borrowers belonging to the treated group, compared to the group of borrowers who did not participated to the program. In particular, positive contribution emerges from the evolution of both the cognitive skills and the level of financial knowledge developed by the beneficiaries during the training program. Estimates provide evidence that enhancing cognitive abilities turn out to be strongly beneficial in fostering the accumulation savings, whereas financial principles also had an (although weaker) impact on stimulating a more timely reimbursement of the instalments. We conclude that the financial literacy pilot program has significantly activated women cognitive abilities, giving them the opportunity to apply them both in the course and in their businesses.
本研究基于一项随机对照试验(RCT)，旨在了解2014-2016年在加尔各答附近的非营利性小额信贷机构印度母婴研究所(Institute for india Mother and Child)开展的金融素养试点项目的有效性。与未参加该计划的借款人相比，受治疗组的借款人在储蓄积累和按时偿还分期贷款方面的改善显示了显著的影响。特别是，在培训过程中，受益人的认知技能和金融知识水平的发展产生了积极的贡献。估计提供的证据表明，提高认知能力对促进积累储蓄非常有益，而财务原则对促进更及时偿还分期付款也有(虽然较弱)影响。我们的结论是，金融知识试点项目极大地激活了女性的认知能力，使她们有机会在课程和业务中应用这些认知能力。
{"title":"Activating Women Cognitive Abilities: Impact of a Financial Literacy Pilot Program in India","authors":"L. dalla Pellegrina, Giorgio Di Maio, P. Landoni, Beatrice Rama","doi":"10.2139/ssrn.3396881","DOIUrl":"https://doi.org/10.2139/ssrn.3396881","url":null,"abstract":"This study is based on a randomized control trial (RCT) aimed at understanding the effectiveness of a financial literacy pilot program conducted in 2014-2016 at the Institute for Indian Mother and Child, a non-profit microfinance institution based near Kolkata. Significant impacts are revealed in terms of improvements in saving accumulation and punctuality in the repayment of the loan instalments for borrowers belonging to the treated group, compared to the group of borrowers who did not participated to the program. In particular, positive contribution emerges from the evolution of both the cognitive skills and the level of financial knowledge developed by the beneficiaries during the training program. Estimates provide evidence that enhancing cognitive abilities turn out to be strongly beneficial in fostering the accumulation savings, whereas financial principles also had an (although weaker) impact on stimulating a more timely reimbursement of the instalments. We conclude that the financial literacy pilot program has significantly activated women cognitive abilities, giving them the opportunity to apply them both in the course and in their businesses.","PeriodicalId":415063,"journal":{"name":"University of Milan Bicocca Department of Economics","volume":"37 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2019-05-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"127822173","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Abstract A three-step estimation strategy for dynamic conditional correlation (DCC) models is proposed. In the first step, conditional variances for individual and aggregate series are estimated by means of QML equation by equation. In the second step, conditional covariances are estimated by means of the polarization identity and conditional correlations are estimated by their usual normalization. In the third step, the two-step conditional covariance and correlation matrices are regularized by means of a new non-linear shrinkage procedure and optimally smoothed. Due to its scant computational burden, the proposed regularized semiparametric DCC model (RSP-DCC) allows to estimate high dimensional conditional covariance and correlation matrices. An application to global minimum variance portfolio is also provided, confirming that RSP-DCC is a simple and viable alternative to existing DCC models.
{"title":"Regularized Semiparametric Estimation of High Dimensional Dynamic Conditional Covariance Matrices","authors":"C. Morana","doi":"10.2139/ssrn.3190500","DOIUrl":"https://doi.org/10.2139/ssrn.3190500","url":null,"abstract":"Abstract A three-step estimation strategy for dynamic conditional correlation (DCC) models is proposed. In the first step, conditional variances for individual and aggregate series are estimated by means of QML equation by equation. In the second step, conditional covariances are estimated by means of the polarization identity and conditional correlations are estimated by their usual normalization. In the third step, the two-step conditional covariance and correlation matrices are regularized by means of a new non-linear shrinkage procedure and optimally smoothed. Due to its scant computational burden, the proposed regularized semiparametric DCC model (RSP-DCC) allows to estimate high dimensional conditional covariance and correlation matrices. An application to global minimum variance portfolio is also provided, confirming that RSP-DCC is a simple and viable alternative to existing DCC models.","PeriodicalId":415063,"journal":{"name":"University of Milan Bicocca Department of Economics","volume":"51 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2019-04-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"121551138","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This paper is concerned with preference-aggregation rules satisfying desirable efficiency and solidarity requirements. We formulate weaker versions of existing solidarity axioms and show how they imply, in conjunction with strategy-proofness, the existence of reference outcomes holding privileged status. We propose a new class of rules, fixed order status-quo rules, that can be productively contrasted to their closest counterparts in the literature, status-quo rules based on the least upper bound of a lattice. Fixed order status-quo rules satisfy stronger efficiency requirements than lattice status-quo rules but have weaker, though still significant, solidarity properties. A subfamily based on lexicographic orders is analyzed further. Fixed order status-quo rules are characterized by strategy-proofness, strong efficiency, and a third axiom, unanimity-basedness.
{"title":"Solidarity and Efficiency in Preference Aggregation: A Tale of Two Rules","authors":"Stergios Athanasoglou","doi":"10.2139/ssrn.3285105","DOIUrl":"https://doi.org/10.2139/ssrn.3285105","url":null,"abstract":"This paper is concerned with preference-aggregation rules satisfying desirable efficiency and solidarity requirements. We formulate weaker versions of existing solidarity axioms and show how they imply, in conjunction with strategy-proofness, the existence of reference outcomes holding privileged status. We propose a new class of rules, fixed order status-quo rules, that can be productively contrasted to their closest counterparts in the literature, status-quo rules based on the least upper bound of a lattice. Fixed order status-quo rules satisfy stronger efficiency requirements than lattice status-quo rules but have weaker, though still significant, solidarity properties. A subfamily based on lexicographic orders is analyzed further. Fixed order status-quo rules are characterized by strategy-proofness, strong efficiency, and a third axiom, unanimity-basedness.","PeriodicalId":415063,"journal":{"name":"University of Milan Bicocca Department of Economics","volume":"46 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2018-11-15","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"117333707","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
We consider the overlapping generation model formulated in Dioikitopoulos (2018) that tackles the problem of fiscal policy rules for debt sustainability, allowing for the presence of debt bubbles. The author gives conditions for sustainability achievement in terms of debt and capital control channels, taking into account initial conditions. Our mathematical analysis improves his study and reveals a wider spectrum of possible economic outcomes that might sometimes be opposed to the conclusions to which Dioikitopoulos (2018) comes. In detail, we reconsider the role of fiscal policy prescriptions, implemented by means of debt and capital responsiveness parameters, in determining the existence and multiplicity of stationary states. We also deepen the influence of policy parameters on local stability properties, highlighting the possible occurrence of two bifurcation scenarios and the consequent emergence of periodic and complex dynamics. Moreover, we review the role of fiscal policies in changing the fate of incoming economic scenarios and in preventing non sustainable paths from occurring.
{"title":"Existence, Multiplicity and Dynamic Complexity in an OLG Model with Fiscal Policy and Debt","authors":"L. Cerboni Baiardi, A. Naimzada","doi":"10.2139/ssrn.3222152","DOIUrl":"https://doi.org/10.2139/ssrn.3222152","url":null,"abstract":"We consider the overlapping generation model formulated in Dioikitopoulos (2018) that tackles the problem of fiscal policy rules for debt sustainability, allowing for the presence of debt bubbles. The author gives conditions for sustainability achievement in terms of debt and capital control channels, taking into account initial conditions. Our mathematical analysis improves his study and reveals a wider spectrum of possible economic outcomes that might sometimes be opposed to the conclusions to which Dioikitopoulos (2018) comes. In detail, we reconsider the role of fiscal policy prescriptions, implemented by means of debt and capital responsiveness parameters, in determining the existence and multiplicity of stationary states. We also deepen the influence of policy parameters on local stability properties, highlighting the possible occurrence of two bifurcation scenarios and the consequent emergence of periodic and complex dynamics. Moreover, we review the role of fiscal policies in changing the fate of incoming economic scenarios and in preventing non sustainable paths from occurring.","PeriodicalId":415063,"journal":{"name":"University of Milan Bicocca Department of Economics","volume":"9 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2018-07-28","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"128236551","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Why do some democratic governments react weakly to terrorism, while apparently similar regimes react harshly? More generally, what are the determinants of governments' reaction to terrorism? And, what are the determinants of terrorism and of its dynamic? In this paper we focus on domestic terrorism and counter-terrorism as affected by economic development, political heterogeneity, citizens' human capital, and government accountability and responsiveness. The empirical research has not reached a consensus on the socioeconomic determinants of terrorism. A possible explanation is that observable data may depend on hidden causal links that are not simply caught by standard regressions. In this paper we argue that terrorism activities are endogenous to the governments' counter-terrorism choices, which in turn does depend on political and socioeconomic factors. Our basic point is that both causes and consequences of terror can only be understood in terms of strategic interaction among political actors, primarily government and citizens. We propose a model that considers human capital, economic development, political heterogeneity, government responsiveness and accountability as possible factors influencing terrorism and the government's response. We show that the game has three possible equilibrium outcomes, uniquely determined by our parameters: a Strong Regime characterized by no terrorism, high counter-terrorism and increasing protests, a Flexible Regime characterized by low terrorism which increase or decrease according to the random reaction of the government, and a Permissive Regime characterized by terrorism activity, no counter-terrorism and no protests. We also show that it is possible for a democratic regime to repress harshly and for an autocratic polity to be permissive.
{"title":"Political Regimes and the Determinants of Terrorism and Counter-Terrorism","authors":"Nicola Brugali, P. Buonanno, M. Gilli","doi":"10.2139/ssrn.3214601","DOIUrl":"https://doi.org/10.2139/ssrn.3214601","url":null,"abstract":"Why do some democratic governments react weakly to terrorism, while apparently similar regimes react harshly? More generally, what are the determinants of governments' reaction to terrorism? And, what are the determinants of terrorism and of its dynamic? In this paper we focus on domestic terrorism and counter-terrorism as affected by economic development, political heterogeneity, citizens' human capital, and government accountability and responsiveness. The empirical research has not reached a consensus on the socioeconomic determinants of terrorism. A possible explanation is that observable data may depend on hidden causal links that are not simply caught by standard regressions. In this paper we argue that terrorism activities are endogenous to the governments' counter-terrorism choices, which in turn does depend on political and socioeconomic factors. Our basic point is that both causes and consequences of terror can only be understood in terms of strategic interaction among political actors, primarily government and citizens. We propose a model that considers human capital, economic development, political heterogeneity, government responsiveness and accountability as possible factors influencing terrorism and the government's response. We show that the game has three possible equilibrium outcomes, uniquely determined by our parameters: a Strong Regime characterized by no terrorism, high counter-terrorism and increasing protests, a Flexible Regime characterized by low terrorism which increase or decrease according to the random reaction of the government, and a Permissive Regime characterized by terrorism activity, no counter-terrorism and no protests. We also show that it is possible for a democratic regime to repress harshly and for an autocratic polity to be permissive.","PeriodicalId":415063,"journal":{"name":"University of Milan Bicocca Department of Economics","volume":"143 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2018-07-16","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"132003479","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
京公网安备 11010802042870号
京ICP备2023020795号-1
扫码关注我们
求助内容：
应助结果提醒方式：