Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/170803
Authors: 
Amodio, Francesco
Baccini, Leonardo
Di Maio, Michele
Year of Publication: 
2017
Series/Report no.: 
IZA Discussion Papers 10819
Abstract: 
To address security concerns, governments often implement trade barriers and restrictions on the movement of goods and people. These restrictions have negative economic consequences, possibly increasing the supply of political violence. To test this hypothesis, we exploit the restrictions imposed by Israel on imports to the West Bank as a quasi-experiment. In 2008 Israel started enforcing severe restrictions on the import of selected dual-use goods and materials, de facto banning a number of production inputs from entering the West Bank. We show that after 2008 (i) output and wages decrease in those manufacturing sectors that use those materials more intensively as production inputs, (ii) wages decrease in those localities where employment is more concentrated in these sectors, and (iii) episodes of political violence are more likely to occur in these localities. Our calculations suggest these effects account for 18% of the violent political events that occurred in the West Bank from 2008 to 2014.
Subjects: 
political violence
trade
security
JEL: 
D22
D24
F51
N45
O12
Document Type: 
Working Paper

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