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The main objective of this paper is to empirically investigate the socio-economic causes of terrorism and political violence in a sample of 12 countries in Western Europe. First, we show that in western European countries the classical economic argument of opportunity cost is confirmed. That is, the larger is the set of current economic opportunities for individuals the lower is the likelihood or the willingness for them to be involved in a terrorist activity. Second, expected future economic growth seems to be associated with an increase in current terrorist activities. Eventually, our results also show that terrorist brutality (measured in people killed) is positively associated with real GDP per capita. [Copyright Elsevier B.V.]

The aim of the article is to apply an economic model -- the theory of contests -- to al-Qaeda's operating procedures, in order to account for two of its distinct features: the rise of self-starters and their inclination to mass killing. According to the model, al-Qaeda can be considered as a firm rewarding a prize -- namely, official membership. Since al-Qaeda's goal is to spread terror, the efforts of a candidate member can be assessed by proxy observing the number of casualties. As a result, the argument is that groups that wish to join the network compete to get the price, and their performance is measured in terms of mass murdering. This model is also tested on an empirical case: the July 2005 London bombings, which displays many features of a contest. Policy implications for counter-terrorism are then discussed: following the insights of the model, action should be undertaken in order to falsify or at least confuse al-Qaeda's internal communication. Second, since al-Qaeda's reward is as ideological as economics, efforts should be dedicated to tracking down, and possibly halt, financial flows. Finally, the article suggests further lines of research. Adapted from the source document.

The article applies insights of contest theory to al-Qaeda's recruitment process. Al-Qaeda can be considered as a contest organizer rewarding an indivisible prize, namely, official membership and economic rewards, to candidate extremist groups. Would-be terrorists must then compete with each other to prove their commitment and ability. Candidate terrorist groups compete by maximizing their efforts to win the prize, i.e., maximizing the number of casualties. Eventually, al-Qaeda reaps the benefits of the most successful attacks in the form of a huge return in terms of image, while paying a limited price. If correct, this model carries at least two important implications for counterterrorist policy. First, inasmuch as al-Qaeda's main incentive to prompt competition is through spreading common knowledge about the existence of the prize, action should be undertaken to falsify and confuse the kind of information that aspirant terrorists receive. Second, because al-Qaeda's reward is as much ideological as economic, efforts should be dedicated to track down and halt financial flows before they are used to reward the applicants.

This article presents a theoretical model of conflict between two parties in a two-sector economy. In a 'contested' sector, they struggle to appropriate the maximum possible fraction of a contestable output. In an 'uncontested' sector, they hold secure property rights over the production of some goods. Parties split their resource endowment between 'butter' and 'guns' (in the contested sector) and 'ice cream' (in the uncontested sector). The model predicts that the optimal level of 'guns' depends positively on the price of 'butter' and negatively on the price of 'ice cream'. Theoretical results are tested by means of a panel analysis of sub-Saharan African countries for the period 1980–2017. The results show that international prices of manufactures (interpreted as the uncontested ice cream sector) are negatively associated with arms imports and military expenditure, so confirming the theoretical prediction. In addition, world prices of some commodities are positively associated with arms imports and military expenditure.

This article presents a theoretical model of conflict between two parties in a two-sector economy. In a 'contested' sector, they struggle to appropriate the maximum possible fraction of a contestable output. In an 'uncontested' sector, they hold secure property rights over the production of some goods. Parties split their resource endowment between 'butter' and 'guns' (in the contested sector) and 'ice cream' (in the uncontested sector). The model predicts that the optimal level of 'guns' depends positively on the price of 'butter' and negatively on the price of 'ice cream'. Theoretical results are tested by means of a panel analysis of sub-Saharan African countries for the period 1980–2017. The results show that international prices of manufactures (interpreted as the uncontested ice cream sector) are negatively associated with arms imports and military expenditure, so confirming the theoretical prediction. In addition, world prices of some commodities are positively associated with arms imports and military expenditure.

AbstractThis paper investigates the relationship between the US military spending and public debt in a panel of European countries in the period 1992–2013. Under the established evidence of the interdependence between US and European military spending, we exploited a dynamic panel estimation. Findings show that the debt of European countries is: (1) positively associated with US military spending; (2) negatively associated with average military burden of other European countries.