Terrorism and the effectiveness of security spending in Greece: Policy implications of some empirical findings

Greece has over the years faced serious security challenges from domestic as well as transnational terrorist activity. This paper examines empirically the effectiveness of counter-terrorism policy and particularly it focuses on current and investment expenditure on domestic security and public order. Using annual budget data for the 1974-2004 period, it investigates whether current and investment spending by the Ministry of Public Order has been an effective policy measure to counter terrorism. The results seem to suggest that such investment has at best a weak negative impact on internal terrorist actions. The main policy implication of this finding is that investing in counter-terrorist infrastructure and equipment can potentially prove to be an effective policy measure in the fight against terrorism. This, however, may be conditional upon a number of other factors including other anti-terrorist measures such as legislation or how efficiently such expenditure is used.