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    Military aid, direct intervention and counterterrorism

    Garcia-Alonso, M.D.C. and Levine, P. and Smith, Ron P. (2016) Military aid, direct intervention and counterterrorism. European Journal of Political Economy 44 , pp. 112-135. ISSN 0176-2680.

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    Abstract

    We analyze the choice often faced by countries of whether to directly intervene to counter an external terrorist threat or to subsidize a foreign government to do it. We present a model which analyzes this policy choice where two countries, home and foreign, face a terrorist threat based in the foreign country. The home country chooses how much to invest in defending itself and in reducing terrorist resources either indirectly by subsidising the foreign country or by directly by intervening itself and risking destabilizing the foreign country. We use backward induction to solve a multiple stage game where the home country first commits to its policy decisions, then the foreign country chooses the effort it expends on reducing terrorist capability and finally, the terrorists decide their effort in attacking in the home or foreign country. Using a calibrated model, we are able to show that, for the chosen parameter values, direct intervention is only an equilibrium if foreign and home efforts are not good substitutes in the technology used to reduce the resources of the terrorist group. A higher relative military efficiency by the home country makes intervention more likely.

    Metadata

    Item Type: Article
    Keyword(s) / Subject(s): military conflict, strategic delegation, counterterrorism
    School: Birkbeck Schools and Departments > School of Business, Economics & Informatics > Economics, Mathematics and Statistics
    Research Centre: Innovation Management Research, Birkbeck Centre for
    Depositing User: Ron Smith
    Date Deposited: 15 Nov 2016 11:07
    Last Modified: 16 Oct 2019 15:13
    URI: http://eprints.bbk.ac.uk/id/eprint/16592

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