Volume 14, Issue 1

In this paper we propose an interregional framework as a policy tool for identifying sectors that can stimulate Palestinian economic development while recognizing the reality of the Israeli-Palestinian economic interdependencies. Specifically, this paper emphasizes the potential role of bi-national trade channels to promote Israeli-Palestinian cooperation. To that end, we apply an interregional input-output model to 14 sectors of the Palestinian and Israeli economies and their trading relationships. We then investigate the impact of an exogenous foreign injection under alternative trade scenarios. The results suggest that foreign aid injections to the Banking and Construction sectors in Palestine make the highest impact on Palestinian output. On the other hand, if the primary objective is to promote employment, then injections should be concentrated on the Community, Social, Personal and Household Services sectors.

The International Campaign to Ban Landmines production and use estimates that there are more than 80 billion landmines in the ground in more than 80 countries. Despite the scale of the problem and large investments by OECD countries to clear mines in low income countries, the economic consequences of landmine contamination have been so far unexamined by economists working on the economics of wars, perhaps due to the lack of data thus far. This paper exploits a unique dataset on landmine contamination intensity covering 126 Mozambican districts. Because landmines (unlike other weapons) are used as a weapon of choice to protect territories, the empirical strategy uses an indicator of distance to strategic borders as an instrumental variable to correct for selection in landmine placement. Instrumental variables estimates indicate a large effect of landmine contamination on poverty and consumption several years after the ceasefire. Hence, despite the very high cost to clear a mine a conservative costbenefit evaluation of the national de-mining program indicates that the program generates a large positive return.

This paper endogenously determines the timing of structural breaks in military expenditures and military burdens for the major parties involved in the Israeli-Arab conflict, namely Egypt, Israel, Jordan, and Syria over the period 1960-2004. Utilizing a test proposed by Vogelsang (1997), we find that all these countries experienced significant structural breaks, though at different periods in the late 70s and during the 80s. These structural breaks mark a sharp decline in the military burden that can be attributed to the peace talks that were initiated shortly after the 1973 war. When applying the Bai and Perron (1998, 2003) multiple structural break test we detect two structural breaks for all countries. The first break occurred during the 60s and demonstrated a significant rise in the military burden prior to the 1973 war, whereas the second break corresponds to the aforementioned peace negotiations.

This research presents a new categorical indicator of regime type that is more comprehensive than the dichotomous indicator currently used in most research. My measure distinguishes among the different types of democratic and non-democratic regimes found in the international system between 1800 and 2002. After presenting an extensive overview of the literature from international relations and comparative politics, I discuss the conceptualization and development of the new measure of regime type and then use the new measure in conjunction with the existing Correlates of War Militarized Interstate Dispute data to analyze the conflict escalation propensity of territorial disputes initiated by different types of regimes. In keeping with previous research, I find territorial disputes to be the very contentious. However, not all types of states are equally likely to escalate disputes over territory, suggesting that part of the puzzle surrounding these contentious conflicts might be solved by taking a closer look at the domestic politics within states.

We explain why economic conflicts and illegal business often take place in poor countries. We use the concept of subsistence level of consumption (d) and assume a regular concave utility function for consumption levels higher than d. For consumption levels lower than d utility is constant and equal to zero. Under this framework poor agents are risk-lovers. This result helps to explain why economic conflicts are more likely to appear in poor economies and why poor agents are more willing to undertake illegal business.