Terrorism and poverty: double trouble for macroeconomic performance in African countries

Abstract

This article investigates poverty and terrorism as allies in hindering economic growth in African countries. This study uses data for 22 African countries from 1970 to 2013 i.e. 44 years. Data for terrorism, poverty and national income is taken from GTD and WDI. Panel cointegration techniques of dynamic fixed effect, mean group and pooled mean group are applied to quantify the long-run impact of terrorism and poverty on macroeconomic performance. Moreover, robustness is checked by using various estimators of slope parameters including POLS, FMOLS and DOLS. Empirical findings reveal that both poverty and terrorism have a long-run negative impact the macroeconomic performance. Recommendations for the double trouble are made at the end.

Keywords: Terrorism, Poverty, Macroeconomic Performance, PMG, MG, DFE