The Economics of Terrorism Economics Methods of Analysis in the Study of Terrorism and Counterterrorism (original) (raw)

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.