Terrorism Shocks and Public Spending: Panel VAR Evidence from Europe

Konstantinos Drakos and Panagiotis Th. Konstantinou

No 48, Economics of Security Working Paper Series from DIW Berlin, German Institute for Economic Research

Abstract: Based on a trivariate panel VAR and utilizing Generalized Impulse Responses, we explored the dynamic impacts of terrorism and crime risks on public order and safety spending across European countries during the period 1994-2006. Our findings suggest that both a shock in terrorism risk or in crime, significantly increase the subsequent trajectory of public order and safety spending. As a by-product we find that public spending is ineffective in reducing observed crime or terrorism risks.

Keywords: Panel VAR; Public Order and Safety Spending; Terrorism Activity (search for similar items in EconPapers)
Pages: 27 p.
Date: 2011
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Citations: View citations in EconPapers (2)

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