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“The Economic Costs of Separatist Terrorism in Turkey”

Author

Listed:
  • Firat Bilgel

    (Department of Economics, Okan University Tuzla Campus Akfirat 34959 Istanbul Turkey.)

  • Burhan Can Karahasan

    (Department of Economics, Okan University Tuzla Campus Akfirat 34959 Istanbul Turkey.)

Abstract
Turkey has been suffering from separatist terrorism and the political conflict it implies since the mid-1980s, both of which are believed to have a negative impact on economic welfare. This article investigates the economic costs of PKK (Kurdistan Workers’ Party) terrorism, particularly in the Eastern and Southeastern provinces of Turkey by invoking the synthetic control method. We create a synthetic control group that mimics the socioeconomic characteristics of the provinces exposed to terrorism before the PKK terrorism emerged in the mid-1980s. We then compare the real GDP of the synthetic provinces without terrorism to the actual provinces with terrorism for the period 1975-2001. Causal inference is carried out by comparing the real per capita GDP gap between the synthetic and actual provinces and the intensity of terrorist activity as measured by the number of terrorism casualties. We find that after the emergence of terrorism, the per capita real GDP in Eastern and Southeastern Anatolia declined by about 6.6 percent relative to a comparable synthetic Eastern and Southeastern Anatolia without terrorism.

Suggested Citation

  • Firat Bilgel & Burhan Can Karahasan, 2013. "“The Economic Costs of Separatist Terrorism in Turkey”," AQR Working Papers 201314, University of Barcelona, Regional Quantitative Analysis Group, revised Nov 2013.
    • Handle: RePEc:aqr:wpaper:201314
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    File URL: http://www.ub.edu/irea/working_papers/2013/201322.pdf
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    References listed on IDEAS

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    3. Olayiwola, Saheed O. & Bakare-Aremu, Tunde Abubakar & Abiodun, S.O., 2021. "Public Health Expenditure and Economic Growth in Nigeria: Testing of Wagner's Hypothesis," African Journal of Economic Review, African Journal of Economic Review, vol. 9(2), April.
    4. Mbindyo Jedidah Ndinda & Dr. Casper Masiga, 2024. "Assessing the Effects of Terrorism on the Living Conditions of Residents in Garissa County, Kenya," International Journal of Research and Innovation in Social Science, International Journal of Research and Innovation in Social Science (IJRISS), vol. 8(5), pages 86-96, May.
    5. Firat Bilgel & Burhan Can Karahasan, 2019. "Thirty Years of Conflict and Economic Growth in Turkey: A Synthetic Control Approach," Defence and Peace Economics, Taylor & Francis Journals, vol. 30(5), pages 609-631, July.
    6. Pinar Deniz & Burhan Can Karahasan & Mehmet Pinar, 2021. "Determinants of regional distribution of AKP votes: Analysis of post‐2002 parliamentary elections," Regional Science Policy & Practice, Wiley Blackwell, vol. 13(2), pages 323-352, April.
    7. Aleksandar Kešeljević & Rok Spruk, 2024. "Estimating the effects of Syrian civil war," Empirical Economics, Springer, vol. 66(2), pages 671-703, February.
    8. Ramazan ErdaÄŸ, 2021. "Security Environment and Military Spending of Turkey in the 2000s," Contemporary Review of the Middle East, , vol. 8(1), pages 120-139, March.
    9. Gok, Ibrahim Yasar & Demirdogen, Yavuz & Topuz, Sefa, 2020. "The impacts of terrorism on Turkish equity market: An investigation using intraday data," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 540(C).
    10. Samuel Verevis & Murat Üngör, 2021. "What has New Zealand gained from The FTA with China?: Two counterfactual analyses†," Scottish Journal of Political Economy, Scottish Economic Society, vol. 68(1), pages 20-50, February.
    11. Mohammad Reza Farzanegan, 2019. "The Opportunity Cost of the Islamic Revolution and War for Iran," MAGKS Papers on Economics 201929, Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung).
    12. Tekin Kose & Julide Yildirim & Gizem Tanrivere, 2017. "The Effects of Terrorism on Happiness: Evidence from Turkey," EcoMod2017 10229, EcoMod.
    13. Mohammad Reza Farzanegan & Sven Fischer, 2023. "The Impact of a Large-Scale Natural Disaster on Local Economic Activity: Evidence from the 2003 Bam Earthquake in Iran," CESifo Working Paper Series 10502, CESifo.
    14. Ruiz Estrada, Mario Arturo & Park, Donghyun & Khan, Alam, 2018. "The impact of terrorism on economic performance: The case of Turkey," Economic Analysis and Policy, Elsevier, vol. 60(C), pages 78-88.
    15. Germá-Bel & Maximilian Holst, 2016. "“A two-Sided coin: Disentangling the economic effects of the 'War on drugs' in Mexico”," IREA Working Papers 201611, University of Barcelona, Research Institute of Applied Economics, revised Apr 2016.

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