Presented on February 10th, 2013 at the Second Research Competitive Grants Conference in Islamabad, Pakistan.

1. Economic Growth and Protection of
Life, Property and Contract.
Shabib Haider Syed
Zahid Iqbal
Luqman Saeed
Rabia Saeed

2. Problem Statement
Pakistan faces two major challenges, how
to establish and sustain democracy and
how to stimulate and sustained growth?
These two issues can be bridged through
the quality of its institutions. The quality
of institutions not only ensures the
sustainability of democracy but also
determines its long run economic growth.
The adverse institutional structure hinders
sustained growth.

3. Objectives
Compilation, construction and analysis of
time series data on terrorism, crime and
suicide.
To estimate the impact of terrorism, crime
and suicide on economic performance.

4. Objectives Achieved
Literature Review
Institutions, Terrorism, Crime and
Suicide.
Data

5. Literature Review
Study Objectives Data Main findings
De Long and Schleifer Impact on Institutions on City expansion 1050-1800 Positive Impact of Non Absolutist governments
(1993) Medieval Europe
Knack and Keefer Institutions 1974-89, 97 countries, Positive Impact of Institutions
(1995) ICRG, BERI, Gastil
Alesina et al (1996) Political Instability 113, 1950-82 Negative impact of government collapse on
Propensity of Government collapse Development
Knack and Keefer Institutions, ICRG, BERI Positive Impact
(1998) Convergence
Acemoglu and Relative importance of Country risk services, Polity IV Property rights have stronger impact.
Ronbinson (2003) property and contarct
rights
Gerring et al (2005) Impact of democracy on Polity 2, Polity IV Positive impact of democracy on development
development

6. Literature Reivew
Enders and Sandler (1996) Impact of terrorism on FDII, 13.5, 11.9 percent decrease
Spain and Greece in Spain and Greece
Abadie & Gardaezabal(2003) Economic impact of terrorism on 1968-2000 -10 % PCI,
Basque region
Bloomberg, Hess & Orphanides Macro-economic consequences of Panel data T –PCI
(2004) terrorism 177 countries G crowds in, I crowds out.
1968-2000
Barth et al (2006) Impact of terrorism on growth and T – growth and capital
capital formation
Crain and Crain (2006) Economic impact of terrorism Panel data Unanticipated level of incidents
147 countries most significant.
1968-2002
Abadie and Gardeazabal (2007) Terrorism Impact on FDI - Impact on FDI
Gaibulleov and Sandler (2006) Economic Impact of terrorism in Panel Data -Growth.
South Asia. 42 Countries
1970-2004 GTD significant predictor of
investment.
Gaibulleov(2010) Economic impact of terrorism 1970-2007 No significant relation
Tayab et al (2011) Impact of terrorism on financial Time Series- Primary data KSE index affected significantly
markets of Pakistan for terrorism.
2006-08

7. Literature Review
Londono and Guerrero (2000) Direct cost of violence 7 percent of GDP
in Venezuela
Buvinic and Morrison (2000) Cost of Violence in Latin Health, 0.3 to 5 percent of GDP,
America Policing, 2 to 9 % of GDP
Anderson (2009) Cost of crime in US Per capita crime burden US $
4118.42
Loureiro and Delfino Silve (2010) Cost of Violence - Investment and growth
Rincke (2010) 5 incidents per 1000 pop, 0.5
percent reduction In earnings.
Detotto and Otranto (2010) Impact of crime on Reduces growth by 0.0004
growth percent

8. Data
Terrorism (GTD and SATP)
Crime (Major categories)
Suicide (Punjab and Sindh completed.
Baluchistan and Khybar Pakhunkhwa
completed since 2000)

9. Terrorism Trend
Terrorism Trend (1981-2010)
6000 Lal Masjid
5000
Baluch Insurgency
4000
Incidents
3000 Casualties
2000
Afghan Jihad final Wana
Operation Clean-up 9/11
phase
1000 Sectarian
0
1981 1984 1987 1990 1993 1996 1999 2002 2005 2008

10. Descriptive Statistics
Years Incident Wounde Killed Casualti Casualti Mean Coefficie
s d es es per Incidenc nt of
incidenc e Variation
e
1980-89 186 1467 303 1770 9.5 23.25 146.88
1990-99 1977 4338 2405 6743 3.4 198.36 39.30
2000-10 3264 12997 13727 26724 8.1 331.8 78.93
1981- 5427 18802 16435 35237 6.49 200.16 98.36
2000

11. Per capita income and terrorism
growth rate

12. Methodology
α α1 α2 α3 α4 α5
Yt =At(K ,L ,Tar ,Sui ,Cri ,CIM )
t t t t t t
LogYt =LogAt+α LogK t +α 1LogL t +α 2 LogTart +α 3LogSui t +α 4LogCri t +α 5 LogCIM t + µ t

13. Preliminary Results
Variables Coefficients
C 1.196
Log of Capital 0.224***
Log of Labor 0.201*
Log of Openness 0.056
Log of Secondary School Enrollment 0.111**
Log of Incidents -0.015***
Log of Lagged Per capita income 0.390***
***, ** and * shows significance level of one, five and ten percent respectively.

14. Challenges
Due to unavailability of data prior to
2000, time series data of suicide is being
constructed through newspapers. This is
the first comprehensive data on suicide in
Pakistan since 1980. Data cleaning and
validation is taking time.

15. Way forward
Data on Suicide (KPK and Baluchistan
prior 2000)
Estimation and Analysis