Applying Intermediate Microeconomics to Terrorism

The authors show how microeconomic concepts and principles are applicable to the study of terrorism. The utility maximization model provides insights into both terrorist resource allocation choices and government counterterrorism efforts, and basic game theory helps characterize the strategic interdependencies among terrorists and governments.     

Terrorism and the closure of society: A social-impact projection

A social-impact projection of terrorism in the United States is presented in the ligth of recent conceptual and methodological developments. The projections proper explore the effect of a terrorist climate on: demography,security, and the cost of living, letter and spirit of the law, paramilitary groups, and mental health. It is suggested that the most effective way of halting terrorism rests in the formula of “mass times velocity equals impact.” This entails a swift and massive application of force that leaves society vulnerable to militarization, the possibility of a “garrison state,” and an overall closure of society in general.     

Islamist terrorism and the status of women

We investigate the effect of Islamist terrorist activity on women's legal position in society, using data for 171 countries between 1970 and 2016. To identify causal effects, we exploit the prevalence of Islamist terrorism in neighboring countries as an exogenous source of variation, arguing that regional terrorism affects local terrorism through contagion effects. We show that increased activity by Islamist terrorist groups is linked to lower legal status of women. By contrast, we find that neither Islam per se nor other types of terrorism have comparable effects. This reinforces the notion that Islamist terrorism is singularly interested and effective in weakening women's rights. Our results are consistent with a rational-economic model of terrorism, where Islamist terrorists purposefully use violence to maximize political utility, while governments make concessions that constrain the role of women because the costs of compliance are lower than the harm from continued Islamist terrorism.     

International Terrorism,Domestic Political Instability,and the Escalation Effect

What are the main causes of international terrorism? Despite the meticulous examination of various candidate explanations, existing estimates still diverge in sign, size, and significance. This article puts forward a novel explanation and supporting evidence. We argue that domestic political instability provides the learning environment needed to successfully execute international terror attacks. Using a yearly panel of 123 countries over 1973–2003, we find that the occurrence of civil wars increases fatalities and the number of international terrorist acts by 45%. These results hold for alternative indicators of political instability, estimators, subsamples, subperiods, and accounting for competing explanations.     

NUCLEAR TERRORISM: REACTOR SABOTAGE AND WEAPONS PROLIFERATION RISKS

Nuclear power plants and research reactors are vulnerable to acts of terrorism that could render safety systems inoperable and result in catastrophic releases of radioactivity. In addition, expanding civil commerce in weapon-usable forms of plutonium and uranium and deploying tactical nuclear weapons in areas where terrorists are active increase the risk of terrorists' building or stealing nuclear weapons or, even more likely, carrying out a credible hoax.
The United States and other advanced industrialized nations should be concerned about nuclear terrorism, the threat of which now is perceived as low. However, if terrorist groups become more determined, violent, and technologically advanced, as some experts anticipate, then the possibility of nuclear terrorism will likely increase with little warning. Nuclear terrorism, regardless of where it occurs, could have far-reaching consequences for economic stability and world peace. Western Europe is a region of continuing concern due to its high level of "nuclearization" – that is, civil and military nuclear development – and the presence of sophisticated terrorist organizations operating across national boundaries.
This paper reviews potential dangers and available remedies based on the report of the International Task Force on Prevention of Nuclear Terrorism, on policy and technical studies prepared for the Task Force, and on follow-up research conducted by the Nuclear Control Institute, the Task Force's sponsoring organization.     

Exploring the nexus: Foreign aid,war on terror,and conflict in Pakistan

This study explores the nexus between foreign aid, war on terror, and terrorism in Pakistan for the period 1972–2010. By making use of Johansen method of cointegration, the paper concludes that, contrary to the popular assumption, there is no association between foreign assistance and conflict in Pakistan. However, the impact of foreign aid on terrorism is positive in the long run during the war on terror period. Furthermore, the positive impact of GDP on terrorism mirrors the fact that militants consider terrorist attacks a feasible option compare to open war in face of enhanced state capacity. The study also unearths the non-linear U-shape relationship between political repression and violence in the long run.     

The socio-economic determinants of terrorism and political violence in Western Europe (1994–2007)

The main objective of this paper is to empirically investigate the socio-economic causes of terrorism and political violence in a sample of 12 countries in Western Europe. First, we show that in western European countries the classical economic argument of opportunity cost is confirmed. That is, the larger is the set of current economic opportunities for individuals the lower is the likelihood or the willingness for them to be involved in a terrorist activity. Second, expected future economic growth seems to be associated with an increase in current terrorist activities. Eventually, our results also show that terrorist brutality (measured in people killed) is positively associated with real GDP per capita.     

A strategic analysis of the war against transnational terrorism

We study a two stage game in which a transnational terrorist organization interacts with an arbitrary number of countries that may differ in their political or economic power, their military effectiveness, the benefit from cooperating against terrorism and the value they assign to damage. Only a subset of countries that emerges endogenously takes proactive measures to fight the terrorist, while all countries incur defensive expenditures to protect their soil. We characterize analytically the pure strategy subgame perfect equilibrium of the game and show how the equilibrium strategies depend on the key model parameters. We provide an algorithm to find the endogenous set of cooperating countries based on their benefit from cooperation and their political/economic power.     

Terrorism and the world economy

It has been argued that terrorism should not have a large effect on economic activity, because terrorist attacks destroy only a small fraction of the stock of capital of a country (see, e.g., Becker, G., Murphy, K., 2001. Prosperity will rise out of the ashes. Wall Street Journal October 29, 2001). In contrast, empirical estimates of the consequences of terrorism typically suggest large effects on economic outcomes (see, e.g., Abadie, A., Gardeazabal, J., 2003. The economic cost of conflict: A case study of the Basque country. American Economic Review 93, 113-132). The main theme of this article is that mobility of productive capital in an open economy may account for much of the difference between the direct and the equilibrium impact of terrorism. We use a simple economic model to show that terrorism may have a large impact on the allocation of productive capital across countries, even if it represents a small fraction of the overall economic risk. The model emphasizes that, in addition to increasing uncertainty, terrorism reduces the expected return to investment. As a result, changes in the intensity of terrorism may cause large movements of capital across countries if the world economy is sufficiently open, so international investors are able to diversify other types of country risks. Using a unique data set on terrorism and other country risks, we find that, in accordance with the predictions of the model, higher levels of terrorist risks are associated with lower levels of net foreign direct investment positions, even after controlling for other types of country risks. On average, a standard deviation increase in the terrorist risk is associated with a fall in the net foreign direct investment position of about 5% of GDP. The magnitude of the estimated effect is large, which suggests that the “open-economy channel” impact of terrorism may be substantial.     

The organizational politics of information technology: Studies from the UK financial servies industry

The article critically appraises two recent contributions to studies of organizational change: processual analysis and the firm-in-sector perspective. These studies argue that managerial practice is intensely political. They also attempt to firmly locate that practice in its organizational and environmental or sectoral context. Drawing upon these studies the article examines the management of information technology (IT) in the UK life insurance sector. This examination uses a case study and sectoral research-in-progress. The article argues that organizational IT use and development is a politicla and social process characterized by tension and conflict between managers. This conclusion suggests that organizational studies of IT use need to develop more sophisticated theories of management and managerial practice. By so doing they may then be able to shed a more penetrating light on the relationships between managers, technologies and organizational change.     

Terrorism and international economic policy

We add to the ongoing discussion regarding the policy consequences of terrorism by analyzing the effect of terrorism on international economic policy for a panel of 170 countries between 1970 and 2016. We find that countries resort to less liberal international economic policies when facing the threat of terrorism. This effect is especially relevant to smaller (less populated) countries. Our main finding is robust to an instrumental-variable approach. We argue that governments pursue less liberal international economic policies in response to terrorism to interrupt the organization and financing of terrorism, limit capital flight, stabilize public finances and signal political resolve.     

The short- and long-run relationship between the illicit drug business and terrorism

We study the effect of the illicit drug business on terrorism for a sample of 58 countries for the 1984–2007 period. Consistent with the notion of a crime-terror nexus, we find that in the long run, higher drug prices are associated with more terrorism. In the short run, however, increases in drug prices lead to less terrorism, potentially because terrorist groups respond to higher drug business attractiveness by prioritizing criminal over terrorist activity.     

THE IMPACT OF TERRORISM AND CONFLICTS ON GROWTH IN ASIA

This paper quantifies the impact of terrorism and conflicts on income per capita growth in Asia for 1970–2004. Our panel estimations show that transnational terrorist attacks had a significant growth-limiting effect. An additional terrorist incident per million persons reduces gross domestic product per capita growth by about 1.5%. In populous countries, many additional attacks are needed to achieve such a large impact. Transnational terrorism reduces growth by crowding-in government expenditures. Unlike developing countries, developed countries are able to absorb terrorism without displaying adverse economic consequences. An internal conflict has the greatest growth concern, more than twice that of transnational terrorism. Conflict variables are associated with smaller investment shares and increased government spending, with the crowding-in of government spending being the dominant influence.     

Dismantling terrorist networks: Evaluating strategic options using agent-based modeling

Dismantling dark networks remains a critical goal for the peace and security of our society. Terrorist networks are the most prominent instantiation of dark networks, and they are alive and well. Attempts to preemptively disrupt these networks and their activities have met with both success and failure. In this paper, we examine the impacts of four common strategies for dismantling terrorist networks. The four strategies are: leader-focused, grassroots, geographic, and random. Each of these strategies has associated pros and cons, and each has different impacts on the structure and capabilities of a terrorist network. Employing a computational experimentation methodology, we simulate a terrorist network and test the effects of each strategy on the resiliency of that network. In addition, we test scenarios in which the terrorist network has (or does not have) information about an impending attack. Our work takes a structural perspective to the challenge of addressing terrorist networks. Specifically, we show how various strategies impact the structure of the network in terms of its resiliency and capacity to carry out future attacks. This paper also provides a valuable overview of how to use agent-based modeling for the study of complex problems in the terrorism, conflict studies, and security study domains.     

Erasing Tamil Eelam: De/Re Territorialisation in the Global War on Terror

This paper considers the Sri Lanka/Tamil Eelam conflict with attention to how its dramatic end can be explained through postcolonial territorial politics. I argue discourses of postcolonial nationalism and global terrorism aligned along domestic, regional, and international political levels to enable a military victory for the government of Sri Lanka. At the domestic political level, there was a change in government along with a split and defection within the LTTE command. At the international level, there was a turn away from Western allies due to their perceived inability to understand the needs of the Asian front in the global war on terror (GWOT). This led to a geopolitical realignment with China, a state sympathetic to fighting terrorism and secession movements. The case is studied under a theoretical lens of “de/re territorialisation” from Gilles Deleuze and Felix Guattari. De/re territorialisation reveals simultaneous efforts to inscribe nationalist meaning into territory in a constant process of “becoming.”     

Applying economic methodology to the war on terrorism

The application of economic methodology to the problem of terrorism is discussed. Theoretical and empirical results are discussed with particular focus on the September 11 attack and the retaliatory response by the United States. Economists have relied on the rational agent model to derive testable hypotheses regarding the behavior of terrorists. The rational agent model postulates that terrorists respond to incentives, including media publicity, and the model predicts that when the net marginal benefit from one type of terrorist activity is diminished, terrorists will substitute into alternative modes of terrorism. Empirical results demonstrating that such substitutions indeed occur are discussed. Therefore, policy designed to reduce a particular form of terrorism, such as increased airport security to prevent airplane hijackings, may simply result in terrorists choosing alternative modes of terrorism. Empirical evidence demonstrating that terrorism is cyclical in nature is also discussed. Evidence on substitution and cycles suggests that following temporary reduction in terrorist activity after retaliation against terrorists and their infrastructure, terrorists are able to successfully regroup and attack using alternative means. Therefore, the current US focus on fighting terrorism on all fronts and over the long haul is the correct approach.     

The origins of terrorism: Cross-country estimates of socio-economic determinants of terrorism

Prior research has concluded that socio-economic development does not significantly affect terrorism. We take an alternative view. First, we note that a country's socio-economic circumstances affect terrorists' behavior through terrorism's opportunity costs. We argue that this reasoning also holds for the case of supreme value terrorism. Then, we run a series of negative binomial regressions for 110 countries between 1971 and 2007 to test the hypothesis that poor socio-economic development is conducive to terrorism. We find that socio-economic variables indeed matter to terrorism, contrary to other results. Our findings imply that countries can benefit from economic development and growth in terms of a reduction in terrorism.     

Foundational explorations for a normative theory of political economy

I set out an individualistic and pragmatic choice framework for a normative theory of political economy, and argue that, given pluralism with respect to individual ends, a consensus on any political or economic institution presupposes that it is perceived to serve as a public means to private ends. Concerning the crucial question of the distribution of the benefits that political and economic cooperation can make possible, I argue that the various models typically employed—those pertaining to competitive market interaction, decision making under uncertainty, bargaining theory, and social choice theory—fail to provide for a stable consensus, i.e., one that is resistant to non-compliance and renegotiation. Since, however, such instabilities are mutually disadvantageous, these approaches fail to establish how rational individuals can capture all the gains that cooperation makes possible. Appealing to a modified version of the social-psychological construction that Rawls introduces in chapter 8 ofA Theory of Justice I argue that stability is a function of a perceived sense of mutual concern. I conclude by arguing that Rawls own egalitarian/efficiency principle gives natural expression to such a concern, and thus can serve as the object of a stable consensus.     

Public opinion and terrorist acts

The paper examines support for terrorism in public opinion and the relationship with terrorist attacks. We link the 2007 PEW survey data on justification for suicide terror and opinions in 16 countries of the Middle East, Africa and Asia on nine regional powers, to the NCTC data on international terrorist acts between 2004 and 2008. We find that justification in public opinion for suicide terrorism increases terror attacks on people in countries that are unfavorably regarded. There is a robust positive relationship between the share of the population in a country that at the same time justifies suicide bombings and has an unfavorable opinion of another country, and terrorism originating from the former country.     

Towards a framework to understand purpose in Futures Studies: The role of Vickers' Appreciative System

There have been comments recently about the efficacy of Futures Studies (and scenario planning) projects, relating to confusion on knowledge aggregation and methodology, which can be summarised in the question: “how to determine the purpose of such projects”. The lack of a purpose framework makes it difficult for ‘clients’ initiating such projects to determine if outcomes meet their original expectations. This paper proposes a framework to help understand the nature, objective and purpose of Futures Studies (and scenario planning) projects, which we will argue helps to overcome these concerns. The proposed framework is based on Vickers' definition of an Appreciative System, highlighting how decision making involves three areas of judgment — reality judgment, value judgment, and instrumental judgment. It will be argued that decision-makers and policymakers call for Futures Studies projects when they become aware of an organizational deficiency in one or more of these areas.Each element, alone or in combination, could form the basis of a purpose definition for a Futures Studies project, and, therefore, needs to be considered to ensure that the project meets client expectations and is experienced as purposeful and rewarding. The paper elaborates on each of the three elements, and then discusses their integrated nature. This is followed by a discussion of the implications of Appreciative System theory for three key players in the decision making process, the organizational leadership, the professionals and the organization at large involved in the practice of Futures Studies (and scenario planning) projects.