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This paper presents panel estimates for 18 Western Europe countries to ascertain the separate impacts of domestic and transnational terrorism on income per capita growth for 1971–2004. The paper merges domestic and transnational terrorist events in order to attribute growth impacts to the two broad categories of terrorism. Each additional transnational terrorist incident per million persons reduces economic growth by about 0.4 percentage points. Domestic terrorism has a much smaller effect on growth that is about half this size. Terrorism's negative impact on growth is related to the scale of terrorism in the sample countries in order to give a better idea of what is the average consequence in most sample countries. These negative impacts are shown to stem from domestic and transnational terrorism's adverse influence on investment shares. Counterterrorism efforts also augment government spending, which crowds out growth-promoting investment. We show that the pathway by which domestic and transnational terrorism influences growth differs. For example, transnational terrorism works more through the crowding out of investment, while domestic terrorism works more through the increase in government expenditure increases. A host of sensitivity tests are performed to support our empirical model. Policy recommendations conclude the paper – e.g., measures to curb transnational terrorist attacks have a higher economic payoff than similar measures to reduce domestic terrorist events. Since transnational terrorism has a larger impact on income per capita growth than does domestic terrorism, West European efforts to curb transnational terrorism will have a greater economic dividend than efforts to limit domestic terrorism. [ABSTRACT FROM AUTHOR]

There are three positions concerning the economic effects of human rights discussed among economists. Some economists argue that only property rights matter for economic growth and basic human rights can even make the legal system less efficient. Others argue that negative rights are generally welfare increasing while positive rights tend to reduce income and growth over time. Yet a third group of economists argues that elements of all groups of human rights are a precondition for making productive use of one's resources and are thus efficiency-enhancing. Based on a cross-country analysis, the effects of different groups of human rights on economic growth are estimated in this paper. The transmission channels through which the different rights affect growth are identified by estimating their effects on investment and overall productivity. Basic human rights have indeed a positive effect on investment, but do not seem to contribute to productivity. Social rights, in turn, are not conducive to investment in physical capital but do contribute to productivity improvements. None of the four groups of rights covered in this analysis ever has a significant negative effect on any of the economic variables included. [ABSTRACT FROM AUTHOR]

SUMMARY The fact that high expenditure on armaments impedes economic growth by diverting ressources from investment has been repeatedly stressed. The present paper indicates an additional route by which military expenditure may slow down economic growth. The clue is taken from the 'export-led growth' models (B eckerman, L amfalussy) which claim a correlation between growth of exports and total economic growth. It is then argued that high military expenditure reduces export availabilities in the machinery and transport equipment sector where chances for export expansion have been above average. This brake on the most expansive sector dampens export growth in general. A slow-down in GNP-growth follows from this. A preliminary glance at the statistical picture shows that the above hypothesis should not be completely ruled out. ZUSAMMENFASSUNG Die wachstumshemmende Wirkung hoher Rüstungsausgaben, die durch die Ver-minderung von Resourcen für Investitionszwecke hervorgerufen wird, ist schon oft betont worden. Die vorliegende Arbeit weist auf einen möglichen weiteren Zusammenhang zwischen Höhe der Militärausgaben und Rate des Wirtschafts-wachstums hin. Ausgangspunkt sind die Theorien eines «export-led growth» (B eckerman, L amfalussy), die eine positive Korrelation zwischen Export- und allgemeinem Wirtschaftswachstum postulieren. Es wird dann darauf hingewiesen, dass hohe Militärausgaben das Exportangebot im Sektor der Maschinen und Ver-kehrsmittel beschneiden, der im Welthandel weit rascher expandiert als andere Sektoren. Diese Bremswirkung im expansivsten Sektor zieht eine Verlangsamung des Exportwachstums im allgemeinen nach sich und führt schliesslich zu einer relativ niedrigeren Wachstumsrate des Bruttosozialprodukts. Ein enter Blick ad das vorhandene statistische Material zeigt, dass die obige Hypothese nicht ohne weiteres von der Hand zu weisen ist. RÉSUMÉ Des dépenses importantes pour l'armement empêchent la croissance économique parce qu'elles détournent les ressources nécessaires à l'investissement. Ce fait est largement connu. L'article se tourne vers une autre relation possible entre la hauteur des dépenses militaires et le ralentissement de la croissance économique. Les théories du «export-led growth» (B eckerman, L amfalussy) servent de point de repère: elles stipulent une corrélation positive entre la croissance économique en général et celle des exportations. L'auteur démontre par la suite que les dépenses militaires élevées réduisent les possibilités d'exportations dans la secteurs des machines et des moyens de transport. On sait que partout l'expansion de ces deux secteurs at bien au-dessus de la moyenne. Pour cette raison un freinage touchant ces deux secteun particulièrement expands ralentira la croissance des exporta-tions en général et aboutira par la suite à un tau d'accroissement moins élevé du produit national brut. Un regard préliminaire Bur le matériel statistique affirme que l'hypothèse developpée par l'auteur ne devrait être exclue. [ABSTRACT FROM AUTHOR]

SUMMARY The main problem of underdeveloped countries consists in an inflexible productive structure which makes it difficult to adopt to changes in world markets. There are three important instruments to improve their flexibility. The first instrument are the investments - not investments in general (this is only of interest in the context of stabilization policies) but specific investment projects or programs. The author distinguishes directly and indirectly productive investments, which require separate investment criteria. For the latter especially the fact ought to be taken account of that they cause large future current expenditures, therefore absorbe future resources ahead of creating them. The second instrument is the budget. In underdeveloped countries its task is not only to finance the public services but also to accumulate savings. It becomes the link between the public and the private sectors as well as between directly and indirectly productive investments, and, by this, the main instrument for development. The third instrument is the balance of payment policy: avoidance of balance of payment crises and efficient use of export receipt. Its further tasks consist in creating public savings-a task that is very often underestimated compared to the infant industry argument or the directing of import and export. In the last part the author scrutinizes a special problem of planning a specific investment project: shadow or accounting prices (wages, interest rates, exchange rate). The theory implies that all investments are directly productive, which ist too simple. When shadow prices are adopted, the budgetary consequences are neglected. E.g. a project is chosen on grounds of low shadow wages, nevertheless market wages have to be paid. The difference is a charge on the budget. The possibilities of productive investment are reduced, the composition of directly and indirectly productive investments altered in favour of the latter, and economic growth diminished. The author therefore concludes that the adoption of shadow prices calculated from a static system might prove disastrous to future growth. The solution would consist in realizingall investment projects the rate of return of which would exceed the interest rate of, say, the World Bank (more or less opportunity cost of capital), and limiting investment in indirectly productive activities to what the budget can stand, in particular to an amount that does not foreclose future savings. [ABSTRACT FROM AUTHOR]

SUMMARY Among economists there has generally been a lack of agreement as to the specific relation between exports and economic growth. The hypothesis presented here is that there is a causal relationship between the two, that this relationship is one of interdependence rather than of unilateral causation, but that it is mainly a rise in exports that stimulates an increase in aggregate economic growth rather than vice versa. There are strong logical and empirical grounds supporting the hypothesis. Rising exports provide the wherewithal for increased imports, so important to economic growth. Emphasis on exports helps concentrate investment in the more efficient sectors of the economy, thus raising productivity. Efficiency is aided further by production for international markets since this permits greater economies of scale and forces firms to hold down their costs in order to remain competitive in international markets. In addition, profitable export industries stimulate additional investment, encourage an increased flow of new technology and managerrial skills, and stimulate increased consumption. The hypothesis was also tested statistically. Multiple correlations and simple least-squares regression equations were calculated for a group of 50 countries using data on average rates of growth of per capita real G. N. P., of exports, and of earnings on current account during 1953-63. The results showed: 1. that the most significant correlation was between exports and G. N. P.; 2. that for every 2 1/2per cent increase in exports, per capita real G. N. P. showed a rise of 1 per cent; and 3. that this last relationship had a high degree of statistical reliability. [ABSTRACT FROM AUTHOR]