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Future Journal of Social Science

Future Journal of Social Science

Abstract

The impact of terrorism is different in developed and developing countries, according to many economists. But what leads to variation in the consequences of terrorism among two developing countries? This paper takes into account two developing countries from two different continents and quantifies the impact of terrorism on GDP per capita. The data is extracted and arranged from the Global Terrorism Index (Humanity, n.d.) for India and Egypt from the years 1975-2018 and 1977-2018, respectively. A set of statistical analyses using the OLS and Newey-West method is used to examine the relationship between the variables. For India, an act of terrorism has no significant impact whereas, for Egypt, terrorism does have growth restricting character. The main reason is the type of regime each country demonstrates. India is a democratic country with a polity score of 9 and on the other hand, Egypt has an authoritarian regime with a polity score of -3.

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