Conflict points around the world involve government forces fighting terrorist groups. In this type of warfare, there is a danger that counterterrorist efforts may backfire, providing ammunition for additional cycles of violence. We study this issue focusing on selective and indiscriminate house demolitions employed by Israel during the Second Intifada. We exploit the temporal and spatial variation of this policy to assess its impact on Palestinians’ political views. We find that the civilian population does not react to punitive house demolitions, a selective form of counterterrorism. On the contrary, Palestinians are more likely to adopt more radical political opinions in response to precautionary house demolitions, an indiscriminate form of counterterrorism. We also show that political radicalization induced by indiscriminate counterterrorism leads to an increase in future terror attacks. Overall, our analysis provides explicit empirical support to the mechanism behind the positive correlation between indiscriminate counterterrorism and future levels of violence.

This paper studies whether crony governance affects the logic behind governments’ targeting of violence, and how the deployment of violence allows politically connected firms to benefit from crony governance.  We address these issues in the context of the Argentine military junta that took power on March 24, 1976.  Specifically, we examine the logic driving the choice of firm level union representatives who were subjected to violence following the coup.  Using an original dataset assembled and digitized by us, we find that political, business and social connections to the regime are associated with an increase of 2 to 3 times in the number of firm level union representatives arrested and/or disappeared.  This is the case even after controlling for a battery of firms’ characteristics that capture alternative explanations for the targeting of violence.  The effect is particularly pronounced in privately owned (as opposed to state-owned) firms, suggesting that the correlation is driven by cronyism for financial gain rather than ideology or information transmission.  We also show that connected firms benefited from violence against union representatives by subsequently having less strikes and a higher market valuation.  Our findings highlight the pervasiveness of ties to the government, even in cases where one of the main stated goals of the regime is to curb cronyism.

This paper provides the first systematic analysis of the link between economic, political, and social conditions and the global phenomenon of ISIS foreign fighters. We find that poor economic conditions do not drive participation in ISIS. In contrast, the number of ISIS foreign fighters is positively correlated with a country's GDP per capita and Human Development Index (HDI). In fact, many foreign fighters originate from countries with high levels of economic development, low income inequality, and highly developed political institutions. Other factors that explain the number of ISIS foreign fighters are the size of a country's Muslim population and its ethnic homogeneity. Although we cannot directly determine why people join ISIS, our results suggest that the flow of foreign fighters to ISIS is driven not by economic or political conditions but rather by ideology and the difficulty of assimilation into homogeneous Western countries. These conclusions are consistent with those of the related qualitative literature that relies on the personal profiles of a small and selected sample of ISIS foreign fighters.

This paper examines the effect of party affiliation on an individual’s political views.  To do this, we exploit the party realignment that occurred in the U.S. due to abortion becoming a more prominent and highly partisan issue over time.  We show that abortion was not a highly partisan issue in 1982, but a person’s abortion views in 1982 led many to switch parties over time as the two main parties diverged in their stances on this issue.  We find that voting for a given political party in 1996, due to the individual’s initial views on abortion in 1982, has a substantial effect on a person’s political, social, and economic attitudes in 1997.  These findings are stronger for highly partisan political issues, and are robust to controlling for a host of personal views and characteristics in 1982 and 1997.  As individuals realigned their party affiliation in accordance with their initial abortion views, their other political views followed suit.

This paper focuses on the centralization program implemented in Israel in 2004 to analyze whether the administrative subordination of municipalities is an effective policy to deal with problems related to soft-budget constraint of lower level governments.  The results consistently show, for different specifications and samples of municipalities, that this program brought a substantial decrease of municipalities’ expenditures (mostly because of decreases on salary payments), and an increase of local property tax collection.  Our analysis shows that all of the fiscal impact of the program is due to the appointment of an accountant that reports directly to the central government, a relatively mild form of administrative subordination.  In contrast, more intrusive forms of subordination, like the central imposition of a recovery program, do not result in any substantial improvement of municipalities’ fiscal situation.  This leads us to conclude that a mild form of administrative subordination is an effective tool to cope with problems related to soft-budget constraints, whereas political subordination is not an effective tool to reach that goal.

This paper investigates whether the 9/11 attacks affected the assimilation rate of Muslims in the United States.  Terror attacks by Islamic groups are likely to induce a backlash against Muslims, thereby raising their costs of assimilation. We find that Muslim immigrants living in states with the sharpest increase in hate crimes also exhibit: (i) greater chances of marrying within their own ethnic group; (ii) higher fertility; (iii) lower female labour force participation; and (iv) lower English proficiency. These findings shed light on the increasing use of terror and concurrent rise in social tensions surrounding Muslim immigrants in the West.

This paper investigates whether attacks against Israeli targets help Palestinian factions gain public support.  We link individual level survey data to the full list of Israeli and Palestinian fatalities during the period of the Second Intifada (2000-2005), and estimate a flexible discrete choice model for faction supported.  We find some support for the “outbidding” hypothesis, the notion that Palestinian factions use violence to gain prestige and influence public opinion within the community.  In particular, the two leading Palestinian factions, Hamas and Fatah, gain in popularity following successful attacks against Israeli targets.  Our results suggest, however, that most movement occurs within either the secular groups or within the Islamist groups, but not between them.  That is, Fatah’s gains come at the expense of smaller secular factions while Hamas’ gains come at the expense of smaller Islamic factions and the disaffected.  In contrast, attacks by the Palestinian Islamic Jihad lower support for that faction.

This paper examines whether house demolitions are an effective counterterrorism tactic against suicide terrorism. We link original longitudinal micro-level data on houses demolished by the Israeli Defense Forces with data on the universe of suicide attacks against Israeli targets. By exploiting spatial and time variation in house demolitions and suicide attacks during the second Palestinian uprising, we show that punitive house demolitions (those targeting Palestinian suicide terrorists and terror operatives) cause an immediate, significant decrease in the number of suicide attacks. In contrast, Palestinian fatalities do not have a consistent effect on suicide terror attacks, while curfews and precautionary house demolitions (demolitions justified by the location of the house but unrelated to the identity of the house's owner) cause a significant increase in the number of suicide attacks. The results support the view that selective violence is an effective tool to combat terrorist groups and that indiscriminate violence backfires.

This study investigates the effect of candidates’ expenditure on elections’ results focusing on run-off elections’ data. Our analysis, based on all run-off municipal elections in Israel between 1993 and 2008, shows that candidates’ share of the vote is not substantially affected by their campaign spending. This outcome contradicts recent results showing that, in a developing country where voting is compulsory, campaign expenditures have a significant effect on vote shares. Yet, it is in line with the evidence of earlier studies based on developed countries showing that the effect of campaign spending is limited. This leads us to suggest that campaign spending may be effective in developing countries with consolidating democracies because compulsory voting forces the relative poor population to turn out and vote, and this population is relatively more impressionable by campaign spending on media advertisements. 

Conventional wisdom suggests that a global increase in monetary rewards should induce agents to exert higher effort. In this paper we demonstrate that this may not hold in team settings. In the context of sequential team production with positive externalities between agents, incentive reversal might occur, i.e., an increase in monetary rewards (either because bonuses increase or effort costs decrease) may induce agents that are fully rational, self-centered money maximizers to exert lower effort in the completion of a joint task. Incentive reversal happens when increasing one agent’s individual rewards alters her best-response function and, as a result, removes other agents’ incentives to exert effort as their contributions are no longer required to incentivize the first agent. Herein we discuss this seemingly paradoxical phenomenon and report on two experiments that provide supportive evidence.

This article analyzes the link between economic conditions and the quality of suicide terrorism.  While the existing empirical literature shows that poverty and economic conditions are not correlated with the quantity of terror, theory predicts that poverty and poor economic conditions may affect the quality of terror.  Poor economic conditions may lead more able and better-educated individuals to participate in terror attacks, allowing terror organizations to send better-qualified terrorists to more complex, higher-impact terror missions.  Using the universe of Palestinian suicide terrorists who acted against Israeli targets in 2000–2006, we provide evidence of the correlation between economic conditions, the characteristics of suicide terrorists, and the targets they attack.  High levels of unemployment enable terror organizations to recruit better educated, more mature, and more experienced suicide terrorists, who in turn attack more important Israeli targets. 

A large number of studies show that war and terrorism have a significant effect on individuals’ political attitudes.  Yet, this extensive literature does not inspect the mechanisms behind this effect.  This paper concentrates on one possible mechanism, by differentiating between the human toll of terror and war and the economic costs they cause.  For these purposes we focus on the Israeli-Palestinian conflict, and use variation in the level of violence across time and space together with localities’ different exposure to the tourism sector to estimate their respective effects on political attitudes.  Our results suggest that whereas fatalities from the conflict make Israelis more willing to grant territorial concessions to the Palestinians, the associated economic costs of conflict do not have a consistent significant effect on individuals’ political attitudes. 

This paper examines how violence influences the political preferences of an aggrieved constituency that is purportedly represented by militant factions. Using longitudinal public opinion poll micro data of the Palestinian population linked to data on fatalities from the Second Intifada, we find that although local Israeli violence discourages Palestinians from supporting moderate political positions, this “radicalization” is fleeting, and vanishes completely within 90 days. We do, however, find evidence suggesting that collateral violence affecting Palestinian civilians has a stronger effect on the populations’ political preferences relative to individuals directly targeted by the Israeli military.  In addition, we observe that major political events in the Palestinian-Israeli conflict have had a longer-term impact on political preferences. Individuals who were teenagers during the period of the Oslo negotiations tend to have relatively moderate preferences, while those who were teenagers during the First Intifada tend to be relatively radical.

The literature on conflict and terrorism has paid little attention to the economic costs of terrorism for the perpetrators. This paper aims to fill that gap by examining the economic costs of harboring suicide terror attacks. Using data covering the universe of Palestinian suicide terrorists during the second Palestinian uprising, combined with data from the Palestinian Labor Force Survey, we identify and quantify the impact of a successful attack on unemployment and wages. We find robust evidence that terror attacks have important economic costs. The results suggest that a successful attack causes an increase of 5.3 percent in unemployment, increases the likelihood that the district’s average wages fall in the quarter following an attack by more than 20 percent, and reduces the number of Palestinians working in Israel by 6.7 percent relative to its mean. Importantly, these effects are persistent and last for at least six months after the attack.

This paper analyzes the impact of terrorism on Israeli companies related to the defense, security or anti-terrorism industries, relative to its impact on the rest of the companies. We match every Israeli company to the American company with the closest expected return among all the companies that belong to the same industry and trade in the same market in order to isolate the effect of terrorism from other common industry shocks. The findings show that whereas terrorism had a significant negative impact of 5% on non defense-related companies, it had a significantly positive overall effect of 7% on defense-related companies.

We design an experiment to study the effects of social identity on preferences over redistribution. The experiment highlights the trade-off between social identity concerns and maximization of monetary payoffs. Subjects belonging to two distinct natural groups are randomly assigned gross incomes and vote over alternative redistributive tax regimes, where the regime is chosen by majority rule. We find that a significant subset of the subjects systematically deviate from monetary payoff maximisation towards the tax rate that benefits their group when the monetary cost of doing so is not too high. These deviations cannot be explained by efficiency concerns, inequality aversion, reciprocity, social learning or conformity. Finally, we show that behavior in the lab helps explain the relationship between reported income and stated preferences over redistribution observed in survey data.

This paper examines whether terrorism is an effective tool to achieve political goals.  By exploiting geographic variation in terror attacks in Israel from 1988 to 2006, we show that local terror attacks cause Israelis to be more willing to grant territorial concessions to the Palestinians.  These effects are stronger for demographic groups that are traditionally right-wing in their political views.  However, terror attacks beyond a certain threshold cause Israelis to adopt a less-accommodating position. In addition, terror induces Israelis to vote increasingly for right-wing parties, as the right-wing parties move to the left in response to terror. Hence, terrorism appears to be an effective strategy in terms of shifting the entire political landscape to the left.