What Can Money Do? How Budget Expenditures Influenced Terrorism in the North Caucasus
What Can Money Do? How Budget Expenditures Influenced Terrorism in the North Caucasus

Summary/Abstract: Over the past decade, Russia has experienced a notable decline in the incidence of terrorist attacks, coinciding with the Russian government’s pursuit of socio-economic development in the North Caucasus region, which has historically been a focal point for such attacks. This paper uses Granger tests to determine whether government economic policies have played a role in reducing terrorist activity in three North Caucasus republics: Dagestan, Ingushetia, and Kabardino-Balkaria. The results of this analysis reveal a direct causal relationship between budgetary expenditure on the national economy and the frequency of terrorist attacks, with higher expenditure correlating with an increase in attacks in two out of the three republics, namely Dagestan and Kabardino-Balkaria. In contrast, public investment in human capital, as operationalized by spending on education and health, is shown to contribute to a decrease in terrorism in one of the three republics, namely Kabardino-Balkaria.

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