A Review of the Economic Costs of the Conflict in Northern Ireland

| Publication date: 7 Aug 2012 | Theme: Trade, Investment & Productivity | NIESR Author(s): Forth, J | External Author(s): G. Brownlow, P. Shirlow, K. McEvoy | JEL Classification: D74; O16 | Report to: Home Office

We review the existing literature which is pertinent to the study of the economic effects of terrorism in Northern Ireland.

Chapters 2-4 broadly set the scene for the study of terrorism and economic activity in Northern Ireland. Chapter 2 begins by mapping out the chronology of major events relating to the conflict, dating back to the first civil rights march in 1968 and extending forwards to the present. This chronological summary is accompanied by a detailed discussion of the background to the conflict and of the actions of the various participant groups. Chapter 3 then builds upon this ethnographic account by presenting a detailed description of the patterns of violence between 1969 and 2009. The nature, volume and duration of violence are each explored through reference to quantitative data describing different manifestations of the conflict. Chapter 4 alters the perspective to consider the development of the Northern Ireland economy since 1945. A major contribution of this chapter, which is relevant to the empirical analysis which comes later in the report, is to highlight the fact that Northern Ireland was a relatively poor region even prior to the outbreak of violence in the late 1960s.

With the broad context to the study firmly established, Chapters 5 and 6 then follow on to consider the relevant literature on the more direct issue of the economic costs of terrorism. Chapter 5 first discusses the theoretical mechanisms by which terrorist activity might affect economic activity within a region or country, outlining the possible direct and indirect effects of a terrorist campaign. The chapter then goes on to summarise some of the existing studies which Ð in common with the present study Ð seek to apply econometric techniques to estimate the economic effects of terrorist activity. Few of these existing econometric studies cover Northern Ireland. There are, however, a number of existing attempts to quantify the economic costs of the conflict to the Northern Ireland economy; these are both summarised and critically assessed in Chapter 6.

Keyword tags: 
terrorism, Northern Ireland, economic growth
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