How Much Does Violence Tax Trade?

Stephen Blomberg and Gregory Hess

No 1222, CESifo Working Paper Series from CESifo

Abstract: We investigate the empirical impact of violence as compared to other trade impediments on trade flows. Our analysis is based on a panel data set with annual observations on 177 countries from 1968 to 1999, which brings together information from the Rose [2004] dataset, the ITERATE dataset for terrorist events, and datasets of external and internal conflict. We explore these data with traditional and theoretical gravity models. We calculate that, for a given country year, the presence of terrorism, as well as internal and external conflict is equivalent to as much as a 30 percent tariff on trade. This is larger than estimated tariff-equivalent costs of border and language barriers and tariff-equivalent reduction through GSPs and WTO participation.

Keywords: trade; conflict; terrorism (search for similar items in EconPapers)
Date: 2004
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Citations: View citations in EconPapers (23)

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Journal Article: How Much Does Violence Tax Trade? (2006)
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Persistent link: https://EconPapers.repec.org/RePEc:ces:ceswps:_1222

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