Posted 13 April 2011
UCD economist awarded Barrington Medal for insights into financial costs of terrorism
Northern Ireland has lost over £2.5 billion in terms of foreign direct investment and tourism income as a direct result of terrorism, according to UCD financial economist, Dr Cal Muckley.
This is the first time that an estimate has been reached on the financial cost of terrorism in Northern Ireland. The figures account for an average loss of £96 million per annum for every year from 1970 to 2007.
According to Dr Muckley, who was awarded the 2010/2011 Barrington Medal in recognition of his work, an estimation of the economic cost of terrorism is vitally important as it has implications for the extent to which the Northern Ireland Assembly should allocate resources to pursue a strategy of intervention.
“It is widely accepted that a variety of factors influence the level of foreign direct investment (FDI) to an economy including political and macroeconomic stability, regulatory issues and science, technology and innovation policy, the tailored skills and educational attainments of its labour force, as well as the effective taxation rate among others,” he said.
“Northern Ireland is a small geographic region which experienced more than 30 years of systematic terrorism until the mid 1990s with the re-emergence of dissident terrorist activities of late.”
“[From an economic point of view] if the expected economic costs arising from a terrorist campaign exceed the expected economic costs of successfully nullifying the threat of terrorism, then the Northern Ireland Assembly should pursue a strategy to nullify that threat.”
Analysis undertaken as part of the research study indicates that for initiatives reliant on foreign direct investment as well as for the tourism sector, a fatality as a result of terrorism in Northern Ireland has a minimum economic cost of £3.69 million.
Dr Cal Muckley is a lecturer in finance and econometrics at the UCD Michael Smurfit Graduate Business School.
The Barrington Medal
The Barrington Medal recognises promising new researchers in the economic and social sciences in Ireland. It is presented by the Council of the Statistical and Social Inquiry Society of Ireland, under the auspices of the Barrington Trust (founded in 1836 by the bequest of John Barrington).
2011 is the 162nd anniversary of the lecture series and Dr Muckley delivered the 124th Barrington Lecture on 24 March in the Royal Irish Academy: ‘Terrorism, Tourism and FDI: Estimating a lower bound on the Peace Dividend in Northern Ireland’.
(Produced by UCD University Relations)
