Do Remittances and Terrorism Impact Each Other?

Kratou Hajer () and Yogo Thierry ()
Additional contact information
Kratou Hajer: Ajman University, College of Business Administration, Ajman, UAE
Yogo Thierry: University of Yaoundé II, Cameroon and The World Bank Group, Nouakchott, Mauritania

Peace Economics, Peace Science, and Public Policy, 2023, vol. 29, issue 3, 189-224

Abstract: Current studies do not conclusively tell us whether there is a causal relationship between remittances and terrorism. Yet, this question is important because the answer has clear implications for the way remittances are monitored and handled. Hence, with this paper, we move a step closer to a definitive answer by studying the impact of remittances on specific terrorist events in 180 countries over the period 1970–2020. We also look in reverse at whether acts of terrorism attract remittances. From event-study analysis and a panel vector autoregression model, Granger causality tests, and a Cholesky decomposition to isolate shocks, we find that we can neither reject the hypothesis that remittances do not Granger-cause terrorism nor reject that terrorism does not Granger-cause remittances. We also find that terrorism response to remittances shock is negative. These findings do not support previous studies that show remittances could be used to fund terrorist attacks. Further, the response of remittance to terrorism shock is null, excepting for Latin America which shows a statistical negative effect. Remittances in Latin America do not appear to respond to conflict. Some of our findings are new, others contradict a large stream of literature (i.e. remittances as a potential source of financing). The insights should be useful to policymakers to facilitate the flow of remittances that result in more disposable income of recipient families and possibly help households to cope with the financial loss of terrorist activity.

Keywords: remittances; terrorism; vector autoregression; quantitative methods (search for similar items in EconPapers)
JEL-codes: F24 F51 (search for similar items in EconPapers)
Date: 2023
References: Add references at CitEc
Citations:

Downloads: (external link)
https://doi.org/10.1515/peps-2023-0036 (text/html)
For access to full text, subscription to the journal or payment for the individual article is required.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bpj:pepspp:v:29:y:2023:i:3:p:189-224:n:2

Ordering information: This journal article can be ordered from
https://www.degruyter.com/journal/key/peps/html

DOI: 10.1515/peps-2023-0036

Access Statistics for this article

Peace Economics, Peace Science, and Public Policy is currently edited by Raul Caruso

More articles in Peace Economics, Peace Science, and Public Policy from De Gruyter
Bibliographic data for series maintained by Peter Golla ().