Hostname: page-component-cd9895bd7-gbm5v Total loading time: 0 Render date: 2024-12-27T08:19:40.506Z Has data issue: false hasContentIssue false
  • English
  • Français

The Opportunity Cost of Conflict: Statistically Comparing Israel and Synthetic Israel

Published online by Cambridge University Press:  24 February 2015

Yusaku Horiuchi  and
Asher Mayerson
Get access Rights & Permissions [Opens in a new window]

Abstract

What would Israel’s economy have looked like without the 2000 Palestinian Intifada? This article examines this counterfactual question by statistically comparing the economic growth trajectories of Israel and a “synthetic” Israel, which is constructed by applying a method proposed by Abadie and Gardeazabal (2003) and Abadie, Diamond and Hainmueller (2010, 2014). The results of the analysis suggest that Israel’s per capita gross domestic product during the Second Intifada was reduced by an average of about $2,003 per year (in 2005 US dollars). This amounts to about 8.6 percent of the 2000 baseline level. In the case of the Second Intifada, the opportunity cost of conflict was indeed substantial and significant.

Type
Original Articles
Information
Political Science Research and Methods , Volume 3 , Issue 3 , September 2015 , pp. 609 - 618
Copyright
© The European Political Science Association 2015 

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

Footnotes

*

Associate Professor of Government and Mitsui Chair in the Study of Japan (email: [email protected]); Class of 2015, Dartmouth College (email: [email protected]). Earlier drafts were presented at Keio University (Tokyo, Japan) on 11 July 2014 and at the Australian National University (Canberra, Australia) on 24 July 2014. We thank Bernard Avishai, Craig Bond, Jeff Friedman, Ippei Fujiwara, Colin McKenzie and Masao Ogaki for their comments and suggestions. The order of authors is alphabetical and does not reflect relative contribution. Online appendices are available at http://dx.doi.org/10.1017/psrm.2014.47.

References

Abadie, Alberto, Diamond, Alexis, and Hainmueller, Jens. 2010. ‘Synthetic Control Methods for Comparative Case Studies: Estimating the Effect of California’s Tobacco Control Program’. Journal of the American Statistical Association 105(490):493–505.Google Scholar
Abadie, Alberto, Diamond, Alexis, and Hainmueller, Jens. 2014. Comparative Politics and the Synthetic Control Method’. American Journal of Political Science, forthcoming, doi: 10.1111/ajps.12116.Google Scholar
Abadie, Alberto, and Gardeazabal, Javier. 2003. ‘The Economic Costs of Conflict: A Case Study of the Basque Country’. American Economic Review 93(1):113–132.Google Scholar
Avishai, Bernard. 2006. ‘Israel: No Peace, No Growth’. The Wall Street Journal. Available at http://online.wsj.com/news/articles/SB115170846156195828, accessed 10 January 2014.Google Scholar
Avishai, Bernard. 2008. The Hebrew Republic: How Secular Democracy and Global Enterprise Will Bring Israel Peace at Last. Orlando: Harcourt.Google Scholar
Avishai, Bernard. 2013. ‘Envisioning a Peaceful Israel, Scientifically’. The New Yorker. Available at http://www.newyorker.com/online/blogs/currency/2013/11/envisioning-a-peaceful-israel-scientifically.html, accessed 10 January 2014.Google Scholar
Bard, Mitchell. 2011. ‘Israeli Economy Strong Despite Conflict’. The Cutting Edge, 30 November. Available at http://www.thecuttingedgenews.com/index.php?article=53236, accessed 2 January 2014.Google Scholar
Bassok, Moti. 2011. ‘Israeli GDP Surges Up OECD Ranks in 2010’. Haaretz, 17 February. Available at http://www.haaretz.com/print-edition/news/israeli-gdp-surges-up-oecd-ranks-in-2010-1.343832, accessed 10 January 2014.Google Scholar
Billmeier, Andreas, and Nannicini, Tommaso. 2013. ‘Assessing Economic Liberalization Episodes: A Synthetic Control Approach’. The Review of Economics and Statistics 95(3):983–1001.Google Scholar
Blomberg, S. Brock, Hess, Gregory, and Orphanides, Athanasios. 2004. ‘The Macroeconomic Consequences of Terrorism’. Journal of Monetary Economics 51(5):1007–1032.Google Scholar
Bolt, Jutta, and van Zanden, Jan Luiten. 2013. The First Update of the Maddison Project; Re-Estimating Growth Before 1820’. Maddison Project Working Paper No. 4, University of Groningen and Utrecht University. Available at http://www.ggdc.net/maddison/publications/wp.htm, accessed 6 January 2014.Google Scholar
Bozzoli, Carlos, Brück, Tilman, and Sottsas, Simon. 2010. ‘A Survey of the Global Economic Costs of Conflict’. Defence and Peace Economics 21(2):165–176.Google Scholar
Collier, Paul. 1999. ‘On the Economic Consequences of Civil War’. Oxford Economic Papers 51(1):168–183.Google Scholar
Cranna, Michael, and Binda, Nils. 1995. The True Cost of Conflict: Seven Recent Wars and Their Effects on Society. New York: The New Press.Google Scholar
Eckstein, Zvi, and Tsiddon, Daniel. 2004. ‘Macroeconomic Consequences of Terror: Theory and the Case of Israel’. Journal of Monetary Economics 51(5):971–1002.Google Scholar
Fielding, David. 2003. ‘Counting the Cost of the Intifada: Consumption, Saving and Political Instability in Israel’. Public Choice 116:297–312.Google Scholar
Futehally, Ilamas, and Waslekar, Sundeep. 2009. Cost of Conflict in the Middle East. Mumbai: Strategic Foresight Group.Google Scholar
Gaibulloev, Khusrav, and Sandler, Todd. 2011. ‘The Adverse Effect of Transnational and Domestic Terrorism on Growth in Africa’. Journal of Peace Research 48(3):355–371.Google Scholar
Gleditsch, Kristian S. 2002. ‘Expanded Trade and GDP Data’. Journal of Conflict Resolution 46(5):712–724.Google Scholar
Heston, Alan, Summers, Robert, and Aten, Bettina. 2012. Penn World Table, Version 7.1’. Available at https://pwt.sas.upenn.edu/php_site/pwt_index.php, accessed 6 January 2014.Google Scholar
Lopez, Humberto, and Wodon, Quentin. 2005. ‘The Economic Impact of Armed Conflict in Rwanda’. Journal of African Economies 14(4):586–602.Google Scholar
Meierrieks, Daniel, and Gries, Thomas. 2013. ‘Causality Between Terrorism and Economic Growth’. Journal of Peace Research 50(1):91–104.Google Scholar
Montalvo, José G. 2011. ‘Voting After the Bombings: A Natural Experiment on the Effect of Terrorist Attacks on Democratic Elections’. Review of Economics and Statistics 93(4):1146–1154.Google Scholar
Morag, Nadav. 2006. ‘The Economic and Social Costs of Terrorism: Israel 2000-2004’. Middle East Review of International Affairs 10(3):120–141.Google Scholar
Murdoch, James C., and Sandler, Todd. 2004. ‘Civil Wars and Economic Growth: Spatial Dispersion’. American Journal of Political Science 48(1):138–151.Google Scholar
Nitsch, Volker, and Schumacher, Dieter. 2004. ‘Terrorism and International Trade: An Empirical Investigation’. European Journal of Political Economy 20(2):423–433.Google Scholar
Persitz, Dotan. 2006. The Economic Effects of Terrorism: Counterfactual Analysis of the Case of Israel’’. Working Paper, Tel Aviv University. Available at http://www.aeaweb.org/annual_mtg_papers/2007/0106_1015_1802.pdf, accessed 6 January 2014.Google Scholar
Senor, Dan, and Singer, Saul. 2009. Start-Up Nation: The Story of Israel’s Economic Miracle. New York: Twelve.Google Scholar
Shavit, Ari. 2007. ‘Don’t Bank On It’. Haaretz, 4 January. Available at http://www.haaretz.com/weekend/magazine/don-t-bank-on-it-1.209149, accessed 10 January 2014.Google Scholar
Swirski, Shlomo. 2012. The Burden of the Israeli-Palestinian Conflict: 2012 Report. Tel Aviv: Adva Center.Google Scholar
Teorell, Jan, Charron, Nicholas, Dahlberg, Stefan, Holmberg, Sören, Rothstein, Bo, Sundin, Petrus, and Svensson, Richard. 2013. ‘The Quality of Government Dataset, Version 20Dec13’. The Quality of Government Institute, University of Gothenburg. Available at http://www.qog.pol.gu.se, accessed 6 January 2014.Google Scholar
Troy, Gil. 2013. ‘Israel Beyond the Conflict’. The Daily Beast, 7 April. Available at http://www.thedailybeast.com/articles/2013/04/17/israel-beyond-the-conflict.html, accessed 6 January 2014.Google Scholar
United Nations Statistics Division, Economic Statistics Branch. 2013. ‘National Accounts Statistics Database’. Available at http://unstats.un.org/unsd/snaama, accessed 6 January 2014.Google Scholar
World Bank. 2013. World Development Indicators. Washington, DC: The World Bank Group.Google Scholar
World Bank. 2014. ‘World Integrated Trade Solution’. Available at http://wits.worldbank.org/, accessed 10 June 2014.Google Scholar
Supplementary material: Link

Horiuchi and Mayerson Datasets

Datasets

http://dx.doi.org/10.7910/DVN/29401
Link
Supplementary material: File

Horiuchi and Mayerson supplementary material

Appendix

Download Horiuchi and Mayerson supplementary material(File)
File 399.9 KB