Working Group on National Security.

• Position: Program and Working Group Meetings

The NBER's Working Group on National Security, directed by NBER President Martin Feldstein of Harvard University, met in Cambridge on February 22. These papers were discussed:

Benjamin F. Jones, Northwestern University and NBER, and Benjamin A. Olken, Harvard University and NBER, "Hit or Miss? The Effects of Assassinations on Institutions and War"

Todd Sandier, University of Texas, and Walter Enders, University of Alabama,

"Economic Consequences of Terrorism on Developed and Developing Countries: An Overview"

Brent Neiman, Harvard University, and Phillip Swagel, U.S. Treasury Department, "The Impact of Post 9/11 Visa Policies on Travel to the United States"

Sandeep Baliga, Northwestern University, and Tomas Sjostrom, Rutgers University, "Strategic Ambiguity and Arms Proliferation"

Stephen I. Miran, Harvard University, "Budget Rules and Defense: Evidence from the EU"

Joseph Cullen, University of Arizona, and Price V. Fishback, University of Arizona and NBER, "Did Big Governments Largesse Help the Locals? The Implications of WWII Spending for Local Economic Activity, 1939-1958" (NBER Working Paper No. 12801)

Assassinations are a persistent feature of the political landscape. Using a new dataset of attempts on the lives of all world leaders from 1875 to 2004, Jones and Olken exploit the inherent randomness in the success or failure of those attempts to identify the effects of assassinations. They find that, on average, successful assassinations of autocrats produce sustained moves toward democracy. They also find that assassinations affect the duration and intensity of small-scale conflicts. These results suggest that individual leaders play key roles in shaping institutions and conflict, and that small sources of randomness, such as perturbations in the path of a single bullet, can have a pronounced effect on history.

The paper by Sandier and Enders has four purposes. First and most importantly, it takes stock of the literature on the economic consequences of terrorism and evaluates the methodology used to date. The literature dates back to the early 1990s, with most of the contributions coming after 9/11. Second, it distinguishes the macroeconomic influences of terrorism from the microeconomic sector- or industry-specific effects. Third, it contrasts terrorism's effects in developed countries with those in developing countries. Fourth, it indicates how researchers can better account for terrorism's economic consequences in developing...