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Mr. Serhan Cevik and John Ricco

-median number of terrorist incidents than those with below-median number of terrorist incidents. This finding, however, is not statistically significant. Second, with regards to the impact on military spending, the point coefficient estimates both for the number of attacks and fatalities are significantly larger in the high terrorism sample than those for the low terrorism sample. 9 Table 3. Heterogeneity in Terrorism Incidence Tax revenue Military spending Military spending Dependent variable: (percent of GDP) (percent of GDP

Mr. Serhan Cevik and John Ricco

Front Matter Page Fiscal Affairs Department Contents I. Introduction II. Terrorism and Economy: What Do We Know? III. Data and Descriptive Statistics IV. Econometric Model and Estimation Results V. Further Robustness Checks VI. Conclusion References Figures 1. Terrorism Across the World Tables 1. Determinants of Tax Revenue (Percent of GDP) 2. Determinants of Military Spending (Percent of GDP) 3. Heterogeneity in Terrorism Incidence 5. Impact of Terrorism in Developing and Low-Income Countries 6. Alternative Definitions

Mr. Serhan Cevik and John Ricco
This paper provides an empirical analysis of how the frequency and severity of terrorism affect government revenue and expenditure during the period 1970–2013 using a panel dataset on 153 countries. We find that terrorism has only a marginal negative effect on tax revenue performance, after controlling for economic and institutional factors. This effect is also not robust to alternative specifications and empirical strategies. On the other hand, we find strong evidence that terrorism is associated with an increase in military spending as a percent of GDP (and a share of total government expenditure). Our estimations reveal that this impact is greater when terrorist attacks are frequent and result in a large number of fatalities. Empirical findings also support the view that public finances in developing and low-income countries are more vulnerable to terrorism than those in countries that are richer and diversified.
International Monetary Fund. African Dept.
This paper discusses Mali’s Request for Three-Year Arrangement Under the Extended Credit Facility (ECF). The economic outlook for Mali remains positive; however, subject to important downside risks. The potential real growth rate is estimated at about 5 percent per year and inflation is expected to continue to be contained by the CFAF’s peg to the euro. Downside risks relate to the possible further deterioration of the security situation, potential shocks to the terms of trade (the price of gold, cotton, and fuels), and adverse weather conditions. Going forward, it is essential to pursue greater spending efficiency, including through strengthened project selection and execution, as well as the rationalization of subsidies. The authorities’ efforts to increase financial inclusion and narrow the gender gap, including by direct measures to economically empower women are welcome. The new ECF arrangement aims to support the authorities’ development strategy (CREDD) for strong and inclusive growth through job creation, economic diversification, and greater resiliency. The main focus in the short term is to significantly increase revenue collection to allow for development spending and to reform the energy sector.
International Monetary Fund. African Dept.

Center and North have been drastically reduced. Figure 1. Economic Impact of Insecurity Sources: Stockholm International Peace Research Institute Military Expenditure database; IMF, WEO; and IMF staff estimates. 3. Security conditions remain extremely fragile in Mali while unrest has spread to neighboring countries, notably Burkina Faso. As shown in Figure 2 below, the sharp increase in frequency of terrorism incidences in the five G-5 Sahel countries is particularly notable in Mali and Burkina Faso. In Mali, the Center and the North are mostly beyond