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Are lives a substitute for livelihoods? : terrorism, security, and U.S. bilateral imports

Author: D Mirza; Thierry Verdier
Publisher: [Washington, D.C.] : World Bank, Development Research Group, Trade Team, [2006]
Series: Policy research working papers, 4094.
Edition/Format:   Print book : International government publication : EnglishView all editions and formats
Summary:
What is the impact of terrorism on trade through higher security at the borders? The authors set up a theory which shows that the impact goes not only from terrorism to trade. Higher trade with a partner might, in turn, increase the probability of terrorism acts and make security measures more costly for total welfare. To identify the true impact of terrorism, their theory allows for a strategy to condition out the  Read more...
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Additional Physical Format: Online version:
Mirza, D. (Daniel).
Are lives a substitute for livelihoods?
[Washington, D.C.] : World Bank, Development Research Group, Trade Team, [2006]
(OCoLC)647549024
Material Type: Government publication, International government publication, Internet resource
Document Type: Book, Internet Resource
All Authors / Contributors: D Mirza; Thierry Verdier
OCLC Number: 81344981
Notes: "December 2006"--Cover.
Description: 45 pages : illustrations ; 28 cm.
Series Title: Policy research working papers, 4094.
Responsibility: Daniel Mirza, Thierry Verdier.

Abstract:

What is the impact of terrorism on trade through higher security at the borders? The authors set up a theory which shows that the impact goes not only from terrorism to trade. Higher trade with a partner might, in turn, increase the probability of terrorism acts and make security measures more costly for total welfare. To identify the true impact of terrorism, their theory allows for a strategy to condition out the latter mechanism. The authors show in particular how past incidents perpetrated in third countries (anywhere in the world except the origin or targeted country) constitute good exogenous factors for current security measures at the borders. Their tests suggest that terrorist incidents have a small effect on U.S. imports on average, but a much higher effect for those origin countries at the top of the distribution of incidents. In addition, the level of the impact is up to three times higher when the acts result in a relatively high number of victims, the products are sensitive to shipping time, and the size of the partner is small. The authors further show how terrorism affects the number of business visas given by the United States, thereby affecting significantly U.S. imports in differentiated products. These results suggest that security to prevent terrorism does matter for trade.

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