Are Lives a Substitute for Livelihoods? Terrorism, Security, and U.S. Bilateral Imports

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 costl...

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Main Authors:	Mirza, Daniel, Verdier, Thierry
Format:	Policy Research Working Paper
Language:	English en_US
Published:	World Bank, Washington, DC 2012
Subjects:	ABSOLUTE VALUE ADJUSTMENT AGRICULTURE ATTACK AUTHORITY BILATERAL IMPORTS BILATERAL TRADE BORDER PROTECTION CAR CIVIL LIBERTIES CONSUMER PRICE INDEX CONTAINER SECURITY COUNTER TERRORIST COUNTER-TERRORISM COUNTRY OF ORIGIN ECONOMIC RENTS ECONOMIC WELFARE ELASTICITY ELASTICITY OF SUBSTITUTION EQUILIBRIUM EXPECTED RETURN EXPORTS FOREIGN DIRECT INVESTMENT GDP GDP PER CAPITA GRAVITY MODEL HUMAN RIGHTS IMMIGRATION IMPERFECT COMPETITION IMPORT VALUE INCREASING RETURNS INTERNATIONAL TRADE LATIN AMERICAN LDCS LEVEL OF SECURITY LOCALIZATION LOGISTICAL SUPPORT MARGINAL COSTS MARITIME TRANSPORT MONOPOLISTIC COMPETITION NASH EQUILIBRIUM NATURAL RESOURCES PERFECT COMPETITION PORTS PROFIT MAXIMIZATION RESTRICTIONS SANCTIONS SECURITY CHECKS SECURITY CONTROLS SECURITY COSTS SECURITY MEASURES SPECIALIZATION TERRORISM TERRORIST TERRORIST ACTIVITIES TERRORIST ACTS TERRORIST ATTACK TERRORIST ATTACKS TERRORIST GROUP TERRORIST GROUPS TERRORIST INCIDENT TERRORIST INCIDENTS TERRORIST ORGANIZATION TERRORIST ORGANIZATIONS TERRORIST SECURITY TERRORISTS THREAT TRADE COSTS TRADE DATA TRADE EFFECTS TRADE FACILITATION TRADE FLOWS TRADE RESTRICTIONS TRADE VOLUMES TRANSACTIONS COSTS TRANSPORT COSTS UNIT OF LABOR WAGE RATE WELFARE LOSSES WORLD TRADE
Online Access:	http://documents.worldbank.org/curated/en/2006/12/7261845/lives-substitute-livelihoods-terrorism-security-bilateral-imports-lives-substitute-livelihoods-terrorism-security-bilateral-imports http://hdl.handle.net/10986/9283

id	okr-10986-9283
recordtype	oai_dc
spelling	okr-10986-92832021-04-23T14:02:42Z Are Lives a Substitute for Livelihoods? Terrorism, Security, and U.S. Bilateral Imports Mirza, Daniel Verdier, Thierry ABSOLUTE VALUE ADJUSTMENT AGRICULTURE ATTACK AUTHORITY BILATERAL IMPORTS BILATERAL TRADE BORDER PROTECTION CAR CIVIL LIBERTIES CONSUMER PRICE INDEX CONTAINER SECURITY COUNTER TERRORIST COUNTER-TERRORISM COUNTRY OF ORIGIN ECONOMIC RENTS ECONOMIC WELFARE ELASTICITY ELASTICITY OF SUBSTITUTION EQUILIBRIUM EXPECTED RETURN EXPORTS FOREIGN DIRECT INVESTMENT GDP GDP PER CAPITA GRAVITY MODEL HUMAN RIGHTS IMMIGRATION IMPERFECT COMPETITION IMPORT VALUE INCREASING RETURNS INTERNATIONAL TRADE LATIN AMERICAN LDCS LEVEL OF SECURITY LOCALIZATION LOGISTICAL SUPPORT MARGINAL COSTS MARITIME TRANSPORT MONOPOLISTIC COMPETITION NASH EQUILIBRIUM NATURAL RESOURCES PERFECT COMPETITION PORTS PROFIT MAXIMIZATION RESTRICTIONS SANCTIONS SECURITY CHECKS SECURITY CONTROLS SECURITY COSTS SECURITY MEASURES SPECIALIZATION TERRORISM TERRORIST TERRORIST ACTIVITIES TERRORIST ACTS TERRORIST ATTACK TERRORIST ATTACKS TERRORIST GROUP TERRORIST GROUPS TERRORIST INCIDENT TERRORIST INCIDENTS TERRORIST ORGANIZATION TERRORIST ORGANIZATIONS TERRORIST SECURITY TERRORISTS THREAT TRADE COSTS TRADE DATA TRADE EFFECTS TRADE FACILITATION TRADE FLOWS TRADE RESTRICTIONS TRADE VOLUMES TRANSACTIONS COSTS TRANSPORT COSTS UNIT OF LABOR WAGE RATE WELFARE LOSSES WORLD TRADE 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. 2012-06-26T19:41:19Z 2012-06-26T19:41:19Z 2006-12 http://documents.worldbank.org/curated/en/2006/12/7261845/lives-substitute-livelihoods-terrorism-security-bilateral-imports-lives-substitute-livelihoods-terrorism-security-bilateral-imports http://hdl.handle.net/10986/9283 English en_US Policy Research Working Paper; No. 4094 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank World Bank, Washington, DC Publications & Research :: Policy Research Working Paper Publications & Research
repository_type	Digital Repository
institution_category	Foreign Institution
institution	Digital Repositories
building	World Bank Open Knowledge Repository
collection	World Bank
language	English en_US
topic	ABSOLUTE VALUE ADJUSTMENT AGRICULTURE ATTACK AUTHORITY BILATERAL IMPORTS BILATERAL TRADE BORDER PROTECTION CAR CIVIL LIBERTIES CONSUMER PRICE INDEX CONTAINER SECURITY COUNTER TERRORIST COUNTER-TERRORISM COUNTRY OF ORIGIN ECONOMIC RENTS ECONOMIC WELFARE ELASTICITY ELASTICITY OF SUBSTITUTION EQUILIBRIUM EXPECTED RETURN EXPORTS FOREIGN DIRECT INVESTMENT GDP GDP PER CAPITA GRAVITY MODEL HUMAN RIGHTS IMMIGRATION IMPERFECT COMPETITION IMPORT VALUE INCREASING RETURNS INTERNATIONAL TRADE LATIN AMERICAN LDCS LEVEL OF SECURITY LOCALIZATION LOGISTICAL SUPPORT MARGINAL COSTS MARITIME TRANSPORT MONOPOLISTIC COMPETITION NASH EQUILIBRIUM NATURAL RESOURCES PERFECT COMPETITION PORTS PROFIT MAXIMIZATION RESTRICTIONS SANCTIONS SECURITY CHECKS SECURITY CONTROLS SECURITY COSTS SECURITY MEASURES SPECIALIZATION TERRORISM TERRORIST TERRORIST ACTIVITIES TERRORIST ACTS TERRORIST ATTACK TERRORIST ATTACKS TERRORIST GROUP TERRORIST GROUPS TERRORIST INCIDENT TERRORIST INCIDENTS TERRORIST ORGANIZATION TERRORIST ORGANIZATIONS TERRORIST SECURITY TERRORISTS THREAT TRADE COSTS TRADE DATA TRADE EFFECTS TRADE FACILITATION TRADE FLOWS TRADE RESTRICTIONS TRADE VOLUMES TRANSACTIONS COSTS TRANSPORT COSTS UNIT OF LABOR WAGE RATE WELFARE LOSSES WORLD TRADE
spellingShingle	ABSOLUTE VALUE ADJUSTMENT AGRICULTURE ATTACK AUTHORITY BILATERAL IMPORTS BILATERAL TRADE BORDER PROTECTION CAR CIVIL LIBERTIES CONSUMER PRICE INDEX CONTAINER SECURITY COUNTER TERRORIST COUNTER-TERRORISM COUNTRY OF ORIGIN ECONOMIC RENTS ECONOMIC WELFARE ELASTICITY ELASTICITY OF SUBSTITUTION EQUILIBRIUM EXPECTED RETURN EXPORTS FOREIGN DIRECT INVESTMENT GDP GDP PER CAPITA GRAVITY MODEL HUMAN RIGHTS IMMIGRATION IMPERFECT COMPETITION IMPORT VALUE INCREASING RETURNS INTERNATIONAL TRADE LATIN AMERICAN LDCS LEVEL OF SECURITY LOCALIZATION LOGISTICAL SUPPORT MARGINAL COSTS MARITIME TRANSPORT MONOPOLISTIC COMPETITION NASH EQUILIBRIUM NATURAL RESOURCES PERFECT COMPETITION PORTS PROFIT MAXIMIZATION RESTRICTIONS SANCTIONS SECURITY CHECKS SECURITY CONTROLS SECURITY COSTS SECURITY MEASURES SPECIALIZATION TERRORISM TERRORIST TERRORIST ACTIVITIES TERRORIST ACTS TERRORIST ATTACK TERRORIST ATTACKS TERRORIST GROUP TERRORIST GROUPS TERRORIST INCIDENT TERRORIST INCIDENTS TERRORIST ORGANIZATION TERRORIST ORGANIZATIONS TERRORIST SECURITY TERRORISTS THREAT TRADE COSTS TRADE DATA TRADE EFFECTS TRADE FACILITATION TRADE FLOWS TRADE RESTRICTIONS TRADE VOLUMES TRANSACTIONS COSTS TRANSPORT COSTS UNIT OF LABOR WAGE RATE WELFARE LOSSES WORLD TRADE Mirza, Daniel Verdier, Thierry Are Lives a Substitute for Livelihoods? Terrorism, Security, and U.S. Bilateral Imports
relation	Policy Research Working Paper; No. 4094
description	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.
format	Publications & Research :: Policy Research Working Paper
author	Mirza, Daniel Verdier, Thierry
author_facet	Mirza, Daniel Verdier, Thierry
author_sort	Mirza, Daniel
title	Are Lives a Substitute for Livelihoods? Terrorism, Security, and U.S. Bilateral Imports
title_short	Are Lives a Substitute for Livelihoods? Terrorism, Security, and U.S. Bilateral Imports
title_full	Are Lives a Substitute for Livelihoods? Terrorism, Security, and U.S. Bilateral Imports
title_fullStr	Are Lives a Substitute for Livelihoods? Terrorism, Security, and U.S. Bilateral Imports
title_full_unstemmed	Are Lives a Substitute for Livelihoods? Terrorism, Security, and U.S. Bilateral Imports
title_sort	are lives a substitute for livelihoods? terrorism, security, and u.s. bilateral imports
publisher	World Bank, Washington, DC
publishDate	2012
url	http://documents.worldbank.org/curated/en/2006/12/7261845/lives-substitute-livelihoods-terrorism-security-bilateral-imports-lives-substitute-livelihoods-terrorism-security-bilateral-imports http://hdl.handle.net/10986/9283
_version_	1764406817510653952

Are Lives a Substitute for Livelihoods? Terrorism, Security, and U.S. Bilateral Imports

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