Raul Caruso

FINMECCANICA AMID INTERNATIONAL MARKET AND STATE CONTROL

Raul Caruso et al. — Thu, 24 Nov 2011 14:09:02 PST

Finmeccanica is the eighth largest arms manufacturer on a world scale. The article explains and discusses its recent evolution. In particular, we discuss the broader privatisation program implemented by the government as a response to the 1992 financial crisis. Finally, we will present our conclusions on how the interplay of domestic factors and external pressures accounts for Finmeccanica‟s peculiar trends. This result, especially Finmeccanica‟s performance, is the consequence of a deep transformation occurred in the past 10 to 15 years in both the industrial base and national defence policy. The two processes appear to be somehow inter-related.

Country Survey: Military Expenditure And Its Impact On Productivity In Italy, 1988–2008

Raul Caruso et al. — Wed, 23 Nov 2011 09:53:05 PST

This paper analyses the military expenditures in Italy over the period 1988–2008. The estimation of a conventional model of military expenditure shows that the choices of military expenditure by Italian governments are influenced by US and, to a lesser extent, the other NATO countries’ defence spending. In particular, the negative association between the US and NATO average military expenditure on the Italian one suggests a free-rider behaviour of Italy. Eventually, we focus on the relationship between productivity and military expenditure. The results suggest that there is a negative association between productivity and military expenditures in the long run. Namely, if military expenditures were substituted by civilian expenditures, the Italian overall productivity would be expected to improve.

The Probability of Military Rule in Africa, 1970-2007

Raul Caruso et al. — Mon, 07 Nov 2011 01:10:49 PST

In this paper we empirically analyze the socio-economic determinants of the existence of military dictatorships in Africa. A recent literature in political economy analyses the relationship between the civil undemocratic government and the military as an agency problem: the civilian government needs the army to avoid internal violence, but a larger army reduces the opportunity-cost for the military to run a coup d’état and seize power. These papers derive three main causes of military rule: income inequality, ethnic fractionalization, and external threat. We empirically analyze these issues by estimating the probability that a country experiences a military rule. We consider 48 African countries over the period 1970-2007.

Life is now! Time discounting and attitude to crime, Evidence from Italian Regions (2001-2007)

Raul Caruso et al. — Mon, 07 Nov 2011 01:03:28 PST

This paper tests the relationship between time preferences and crime rates as posited by Davis (1988), whose theoretical analysis suggests that individuals’ attitude towards the future significantly affect their propensity to commit crime. Our empirical analysis is based on a panel of Italian regions for the period 2002-2007. Various proxies for time preferences are considered: the consumer credit share out of the total amount of loans to households, the share of obese individuals out of the total population, and the rate of marriages out of the total population. In line with the theoretical prediction, our empirical analysis confirms that where people are more impatient and discount the future more heavily, property and violent crimes are higher. Results are robust to a number of alternative specifications including covariates drawn from the literature on the determinants of crime.

International Relative Prices and Civil Wars in Sub-Saharan Africa. Theory and Evidence over the period 1995-2006

Raul Caruso — Tue, 22 Mar 2011 04:01:53 PDT

This paper presents first a theoretical model of conflict between two agents characterized by a two-sector economy. In a contested sector two agents struggle to appropriate the maximum possible fraction of a contestable output. In an uncontested sector, they hold secure property rights over the production of some goods. Agents split their resource endowment between ‘butter’, ‘guns’ and ‘ice-cream’. Eventually, tradable goods made of butter and ice-cream produced by conflicting parties are both sold to the Rest of the world. Therefore, the opportunity cost of conflict depends also on relative profitability of contested and uncontested production. In particular, productivity of uncontested production and profitability of contested sectors are countervailing forces. The empirical section focused on a panel of Sub-Saharan African countries for the period 1995-2006. Results are not fully conclusive. However, there is robust evidence that prices of manufactures (interpreted as the uncontested ice-cream) are negatively associated with the likelihood of a civil war. Eventually, international price of manufactures is also associated with a higher GDP per capita growth rate. The concluding remark seems to be that an increase in world prices of manufactures would make civil wars less likely.

The Socio-Economic determinants of terrorism and political violence in Western Europe (1994-2007)

Raul Caruso et al. — Sun, 20 Feb 2011 06:55:58 PST

The main objective of this paper is to empirically investigate the socio-economic causes of terrorism and political violence in a sample of 12 countries in Western Europe. Results are mixed. First, we show that in western European countries the classical economic argument of opportunity cost can be confirmed. That is, the larger is the set of economic opportunities for an individual the lower is the likelihood or the willingness for him to be involved in a terrorist activity. Second and, however, in line with modernization theory, expected future economic growth seems to be associated with an increase in current terrorist activities. Eventually, our results also show that terrorist brutality (measured in people killed) is positively associated with real GDP per capita.

On the Nature of Peace Economics

Raul Caruso — Sun, 16 Jan 2011 11:07:40 PST

The purpose of this paper is to contribute to the definition of “peace economics.” The core of peace economics has to be found in the distribution between productive and unproductive activities. In particular, such a distribution is shaped by the structure of the economy and the distinction between contested and uncontested activities. The positive “side” of peace economics emphasizes the study of conflict, which is interpreted as a strategic destructive interaction between rational agents. The normative “side” of peace economics is the study of economic policies intended to minimize the unproductive components within economies, thereby also reducing the risk of outbreak of actual conflicts. In this respect, peace economics can also contribute to the study of establishment of endogenous institutions, leading to a permanent peaceful development of societies.

Crime and Sport Participation Evidence from Italian Regions over the period 1997-2003.

Raul Caruso — Sun, 10 Oct 2010 03:46:43 PDT

What is the impact of sport participation on society? This paper is tackling this point by studying whether or not there is a relationship between sport participation and crime. A panel dataset have been constructed for the twenty Italian regions over the period 1997-2003. Results show that: (i) there is a robust negative association between sport participation and property crime; (ii) There is a robust negative association between sport participation and juvenile crime; (iii) There is a positive association between sport participation and violent crime, but it is only weakly significant. Interestingly, there is a complementary effect between education and sport participation on crime.

International Relative Prices and Civil Wars in Africa: A Note

Raul Caruso — Sun, 10 Oct 2010 03:41:58 PDT

The key idea of this paper is that the relative price of primary commodities in terms of manufactured goods affects the likelihood of actual conflicts. The empirical application focused on a panel of Sub-Saharan African countries for the period 1995-2006. Results are not fully conclusive. However, there is robust evidence that a proxy of world price of manufactured goods is negatively associated with the likelihood of a civil war. The conclusion would be that an increase in world prices of manufactured goods would make civil wars less likely.

International Institutions and Peace, An Economic Approach to conflict and integrative activities

Raul Caruso — Sun, 12 Sep 2010 13:25:48 PDT

This is my Phd Dissertation.

Butter, Guns and Ice-Cream, Theory and Evidence from Sub-Saharan Africa

Raul Caruso — Sun, 23 May 2010 01:21:09 PDT

This paper is intended to complement the existing literature on civil wars. First, it presents a simple theoretical model of conflict that defines a two-sector economy. In a contested sector, two agents struggle to appropriate the maximum possible fraction of a contestable output. In an uncontested sector, they hold secure property rights over the production of some goods. Agents split their resource endowment between 'butter', 'guns' and 'ice-cream'. Following the theoretical insights the empirical analysis focuses on the relationship between civil wars and different sectors of the economy. In particular, a panel probit specification shows that the incidence of a civil war decreases in the size of manufacturing sector.

Deadly contests: An economic note on al Qaeda's reward system

Raul Caruso et al. — Sat, 19 Jul 2008 15:08:57 PDT

The article applies insights of contest theory to al Qaeda's recruitment process. Al Qaeda can be considered as a contest organizer rewarding an indivisible prize, namely, official membership and economic rewards, to candidate extremist groups. Would-be terrorists must then compete with each other to prove their commitment and ability. Candidate terrorist groups compete by maximizing their efforts to win the prize, i.e. maximizing the number of casualties. Eventually, al Qaeda reaps the benefits of the most successful attacks in the form of a huge return in terms of image, while paying a limited price. If correct, this model carries at least two important implications for counterterrorist policy. First, inasmuch as al Qaeda's main incentive to prompt competition is through spreading common knowledge about the existence of the prize, action should be undertaken to falsify and confuse the kind of information that aspirant terrorists receive. Second, because al Qaeda's reward is as much ideological as economic, efforts should be dedicated to track down and halt financial flows before they are used to reward the applicants

Una gara al massacro: incentivi, premi e prestazioni dei gruppi terroristici legati ad al Qaeda

Raul Caruso et al. — Tue, 15 Jul 2008 14:46:40 PDT

Abstract: L’obiettivo di questo lavoro è di applicare un modello economico, la 'contest theory', per comprendere il processo con cui al Qaeda recluta e premia gli aspiranti terroristi. In base al modello, al Qaeda può essere considerato come l’organizzatore di una gara che attribuisce un premio indivisibile Poiché l’obiettivo di al Qaeda è di diffondere il terrore, gli sforzi di un potenziale affiliato possono essere ‘misurati’ osservando il numero di vittime che riesce a causare. Di conseguenza, la crescita e la diffusione degli attacchi terroristici su scala globale può essere spiegata come il tentativo da parte di gruppi in competizione di ottenere la membership. Il modello ha poi importanti implicazioni a livello di policy per il controterrorismo. In primo luogo, dato che l’incentivo principale per suscitare la competizione tra i gruppi è diffondere un sapere comune circa l’entità del premio, si può suggerire di intraprendere azioni finalizzate a falsificare o almeno confondere il tipo di informazioni ricevute dagli aspiranti terroristi. In secondo luogo, poiché la ricompensa di al Qaeda è tanto ideologica quanto economica, la prescrizione che ne segue consiste nell’impedire che il premio venga effettivamente riscosso.

Il Calcio tra Mercato, Relazioni e Coercizione

Raul Caruso — Fri, 02 May 2008 15:00:52 PDT

Il punto di partenza di questo breve saggio è la consapevolezza che - in termini economici - il calcio ha una natura ‘multipla’. Esso presenta sia alcune caratteristiche di bene di mercato sia le caratteristiche di un bene relazionale. Nel contempo, il calcio può presentare anche caratteristiche tipiche dei rapporti di coercizione. Il genus specifico del calcio è da ritrovare nella combinazione delle diverse caratteristiche. Non è infatti possibile distinguerle in maniera netta, ma esse coesistono nella produzione del prodotto calcio a tutti i livelli.

Reciprocity in the Shadow of Threat

Raul Caruso — Sun, 02 Dec 2007 02:31:09 PST

This paper considers a partial equilibrium model of conflict where two agents differently evaluate a contested stake. Differently from common contest models, agents have the option of choosing a second instrument to affect the outcome of the conflict. The second instrument is assumed to capture positive investments in ‘conflict management’—labeled as ‘talks’. The focus is on the asymmetry in the evaluation of the stake: whenever the asymmetry in the evaluation of the stake is large there is no room for cooperation and a conflict trap emerges; whenever the degree of asymmetry falls within a critical interval, cooperation seems to emerge only in the presence of a unilateral concession; as the evaluations of the stake converge, only reciprocal concessions can sustain cooperation. Finally the concept of entropy is applied to measure conflict and conflict management.

A Trade Institution as a Peaceful Institution? A Contribution to Integrative Theory

Raul Caruso — Sun, 28 Oct 2007 02:52:39 PDT

Recent studies emphasize the occurrence of conflict as a rational economic activity along with production and exchange. Agents are assumed to divide their efforts into fighting and productive activities, as commonly denoted by "guns" and "butter." This article tries to go beyond this "manichean" idea, assuming Boulding's concept of "integrative system." In particular, the article investigates whether a trade institution committed to free and fair trade could foster "peaceful" benefits for member countries. The analysis, produced in a very simplified world, counts as a founding pillar of the Contest Success Function. The results of the model suggest that in an institutionalized scenario, agents gain more both in terms of economic utility and in terms of peace than in "continuing conflict" and "obstructed trade" scenarios.

Continuing Conflict and Stalemate: A note

Raul Caruso — Sun, 07 Oct 2007 00:45:13 PDT

This note is about the possibility of a stalemate in a continuing conflict. Following the prevailing economic literature on the topic, under some assumptions, the outcome of a conflict can be described in two ways: (i) a predetermined split of the contested output; (ii) a winner-take-all contest where the winning agent is capable to grab all the contested stake. By contrast, in reality many disputes do not have a clear or a definite outcome. A stalemate can end the conflict with the result of a draw. To allow for a stalemate some formal modifications to the classical Hirshleifer’s model of conflict are needed. In particular, since the cornerstone of the economic literature on conflict is the Contest Success Function the possibility of a stalemate can be captured through a modified form of the CSF as axiomatized by Blavatskyy (2004). When a stalemate can emerge, results show that the scenario exhibits a higher degree of violence.

To Lift or not to Lift? A few Notes on the lifting of the European Arms Embargo on China

Raul Caruso — Fri, 05 Oct 2007 23:55:19 PDT

In the last years many european politicians proposed to lift the arms embargo on CHina. This short paper aims to shed light on such proposal of lifting the EU arms embargo to China. First, the legal bindings of the embargo are simply introduced. Then, figures and some elements on arms trade to China are reported. Eventually some concerns on the proposal of lifting are expounded.

A Model of Conflict, Appropriation and Production in a two-sector economy

Raul Caruso — Tue, 18 Sep 2007 08:57:43 PDT

This paper presents a two-sector economy. In a contested sector two agents struggle to appropriate the maximum possible fraction of a contestable output. In an uncontested sector, they hold secure property rights over the production of some goods. Agents split their resource endowment between ‘butter’, ‘guns’ and ‘ice-cream’. The latter denote productive activities secure from appropriation. It is shown how improvements in productivity can countervail destructive impact of continuous conflicts. Eventually a basic model is extended to consider a government and a rival group. A redistributive government can boost production in the uncontested sector, but at a higher level of ‘guns’.

Where Economics Has Been Headed? Multiple Identities and Diversity in Economic Literature, Evidence from Top Journals over the Period 2000-2006, a first note

Luigi Campiglio et al. — Sun, 19 Aug 2007 02:36:58 PDT

This short paper presents some preliminary results of an ongoing research work focusing on richness and diversity of economic literature. The key idea is that each article published in an economic journal retains multiple identities. These multiple identities are captured through the use of JEL codes. A sample of top generalist journals has been selected. The relative abundance of all JEL categories has been computed for the period 2000-2006. Moreover, a degree of diversity has been proposed for both the sampled journals and the entire Econlit database.