Three Essays on the Economics and Finance of Terrorism (original) (raw)
Related papers
The Economic Analysis of Terrorism
Economic and Evolutionary Approaches in Social Sciences, Mihai Ungureanu (ed.), Wolters Kluwer, Bucharest, 2014, 2014
In this chapter I discuss current economic approaches to the study of terrorism, focusing in particular on economic models of terrorist behavior. In the first two sections I provide an outline of the chapter and describe the main characteristics of terrorism, as they are interpreted in the economic approach. In the third section, which represents the central part of the chapter, I discuss the most salient economic models of terrorist behavior, starting from models which analyze terrorism as a rational choice of organizations, i.e. Crenshaw (1990), Pape (2003) and Enders and Sandler (2002), continuing with models which analyze terrorism as a rational choice of individuals, i.e. Caplan (2006), Wintrobe (2002) and Azam (2005) and ending with models inspired from the economy of religion, i.e. Berman (2003), Berman and Laitin (2005) and Iannaccone (2006). In the fourth section I discuss three alternative directions which are of considerable significance in the economy of terrorism, namely economic modeling of terrorist tactics, economic approaches to the determinants of terrorism and economic approaches to the targets of terrorism.
2010
Introduction or background: The Chief of Force Development has tasked the Directorate of Future Security Analysis with writing integrating concepts for each of the six missions outlined in the 2008 Canada First Defence Strategy. The Integrated Concept Development Team (ICDT 2) responsible for researching and writing the Major Terrorist Event (MTE) Concept has been using a methodology where the main concept report will be supported by academic background papers that present the literature, research, and analysis behind the conclusions, implications, and general findings outlined in the main MTE Concept report. This series of papers covers definitions, governance and legislation, lessons learned, future terrorist attacks, as well as cyber threats and strategic communications. The authors have been Major Alain Rollin, Major Meaghan Setter, and Dr Rachel Lea Heide, under the leadership of LCol William Yee. Results: The ICDT 2 writing team did not have the time or capability to research the economic aspects of terrorism in-depth nor to the level of comprehension that an expert in defence economics would already possess. With the help of DRDC CORA, an expert in defence economics was identified and contracted to write an academic background paper on "The Economics of Terrorism." Significance: A review was conducted of significant literature, empirical studies, and a variety of theoretical constructs pertaining to economic aspects of terrorism. In addition to outlining definitions, data sources, choice theory, game theory, and the economic consequences of terrorism, this study identifies how counterterrorism policy issues and capability deficiencies arise from sub-optimal resource allocation and asymmetric (or imperfect) information. Future plans: This report serves as a useful supporting paper to the MTE Concept and complements the series of papers compiled to accompany and inform the MTE Concept, thus ensuring that the methodology for research has not overlooked the economic aspects of terrorism.
Terrorism From Within: An Economic Model of Terrorism
2002
In this paper, we develop and explore the implications of an economic model that links the incidence of terrorism in a country to the economic circumstances facing that country. We briefly sketch out a theory, in the spirit of , that describes terrorist activities as being initiated by groups that are unhappy with the current economic status quo, yet unable to bring about drastic political and institutional changes that can improve their situation. Such groups with limited access to opportunity may find it rational to engage in terrorist activities. The result is then a pattern of reduced economic activity and increased terrorism. In contrast, an alternative environment can emerge where access to economic resources is more abundant and terrorism is reduced. Our empirical results are consistent with the theory. We find that for democratic, high income countries, economic contractions (i.e. recessions) can provide the spark for increased probabilities of terrorist activities.
The terrorist attack in Paris reminded to the Western world the strength and the impetus of terror, in a globalized economy, has no boundaries. To promote the international trade and stimulate our economies, we have introduced a looser control over capitals, people, and ideas movement. The terrorism itself exploits the opportunities that a globalized world is providing. The efficiency of modern terrorism is a strongly asymmetric propagation of information. Every actor withholds different parts of information about the place, the time, the method, the people that will engage in a terrorist, the number of the victims and the extent of destruction that come because of a terrorist attack. To promote the international trade and stimulate our economies, we have introduced a looser control over capitals, people, and ideas movement. The terrorism itself exploits the opportunities that a globalized world is providing. The efficiency of modern terrorism is a strongly asymmetric propagation of information. Every actor withholds different parts of information about the place, the time, the method; the people engaged in the terrorist attack, the number of the victims and the extent of destruction following the terrorist attack Asymmetry is a primary cause for confusion and uncertainty. Doubt plays a role that magnifies the psychological effect the cost for the society under a terrorist attack. Besides change makes difficult for the members of society to feel safe again. The members of the particular community will feel threatened even when the real danger will be a long pass. Eventually, terrorists are becoming stakeholders in the decision-making. They gain influence in directing major political decisions, such as military action, political liberties, and state spending. We remember the goal of terrorism is to undermine the core values and by doing so to amend, in its favor, the status quo. As globalization: we define the extensive and intensive exchange of goods, services, and ideas As a terrorist activity: we can define the deliberate use of violence beyond the standard levels for each country (and, therefore, is relative size) to achieve a political goal by causing panic and or terror and fear initially next to a broad audience.
Terrorism: A Socio-Economic Analysis
Book Chapter, Understanding & Responding to Terrorism Phenomenon (Ed. O. Nikbay & S. Hancerli), IOS Press, Amsterdam 2007, pp.55-70 , 2007
The fundamental problems of the international political order currently seem mainly to be the inability of many states to provide for the welfare and security of their citizens and the demands of global governance in an anarchic world, the horrifying economic disparities between the rich north and the impoverished south, global warming, and AIDS. In addition to these, terrorism has become the number one item on the agenda of world politics since Sep-tember 11. This paper tries to analyze the case of terrorism through the view of an economic historian, its relation with religions, the causes of terrorism from both sides, from attackers and those who are subject to these attacks. The paper focuses on the importance of education to eradicate it and offers to use the ability of empathy, a natural, wonderful God-given gift man is bestowed, to understand each other and act accordingly, and finally suggests a model of man, which is termed man of society, for a peaceful world community. Key words: Terrorism, religious terrorism, world peace, international order, man of society.
International Terrorism: Causes, Consequences and Cures
World Economy, 2008
A popular view is that international terrorism is on the increase, that it is religiously motivated and that it has important adverse consequences. This paper investigates this view. It examines the empirical evidence on the causes of international terrorism from the late 1960s to the early 2000s and discovers that, while religion has had a part to play, explanations based on economics and politics appear to be consistent with the facts. Terrorists come from relatively poor and undemocratic countries and commit attacks in relatively rich and democratic ones. The paper then examines the micro, macro and global economic effects of international terrorism from both a theoretical and empirical angle, and discovers that the negative effect on domestic aggregate demand is temporary and the effect on aggregate supply insignificant. Finally, the paper explores policies to deal with international terrorism and demonstrates that this is complex. Analogies with conventional crime may be unhelpful.