The Impact of Terrorism on Turkey's Economic Performance from 1990 to 2016

Abstract

This research work applies the terrorist attack vulnerability evaluation model (TAVEModel) to evaluate the effect of terrorism on the economic performance of Turkey. We examine both the short run and long-run economic impact of terrorist attacks in Turkey. The TAVE-Model applies a number of indicators to evaluate the economic impact. The indicators are economic desgrowth (-δ), intensity of terrorist activities (αi), terrorist attack losses (-π), economic wear (Π), level of terrorist attack tension (ζ), level of terrorist attacks monitoring (η), and total economic leaking (Ωt) under a terrorist attack. The idea of TAVE-Model is that the economic impact of a terrorist attack depends on a country’s vulnerability to attacks from domestic and international terrorist groups. The application of a model to Turkey is highly topical in light of the spate of terrorist attacks the country suffered recently. The results of TAVE-Model confirms that economic leaking, economic desgrowth, and economic wear has increased from the 1990s to 2016. The issue of terrorism in Turkey is multidimensional, which requires an effective social assistance program as well as a stronger and impartial justice system, that will render poorer Turks and will increase the opportunity cost of terrorism.