The Economic Consequences of Terrorism for the European Union

Published as: Krieger, Tim; Meierrieks, Daniel (2019), The Economic Consequences of Terrorism for the European Union, in: Bossong, Raphael (ed.), Terrorismus als Herausforderung der Europäischen Union, Nomos, Baden-Baden, pp. 87-108.

16 Pages Posted: 25 Jan 2019 Last revised: 16 Sep 2020

See all articles by Tim Krieger

Tim Krieger

University of Freiburg - Department of Economics

Daniel Meierrieks

WZB Berlin Social Science Center

Date Written: January 14, 2019

Abstract

In recent years, a number of major terrorist attacks in EU member states has put the fight against homegrown and international terrorism at the top of the agenda of European policy-makers. This paper analyzes the costs of terrorism in the European Union from both a theoretical and empirical perspective in order to evaluate counter-terrorism policies by comparing their costs and benefits. Two important policy implications can be derived from our exercise. First, individuals’ behavioral predispositions typically result in a biased perception of the risk of terrorism leading to too high a demand for counter-terrorism measures relative to what the objective probability of terrorist events suggests. This results in a tendency to favor repressive over preventive measures against terrorism. Second, uncoordinated European policies against terrorism have the potential to undermine the effectiveness of counter-terrorism measures. If there is a justification for the existence of the European Union (which an increasing number of populist parties in Europe seems to doubt), then it is to provide supranational answers to coordination failure in European counter-terrorism policies.

Keywords: terrorism, home-grown terrorism, European Union, counter-terrorism policies, coordination failure, behavioral responses to terrorism

JEL Classification: D74, H56, N44

Suggested Citation

Krieger, Tim and Meierrieks, Daniel, The Economic Consequences of Terrorism for the European Union (January 14, 2019). Published as: Krieger, Tim; Meierrieks, Daniel (2019), The Economic Consequences of Terrorism for the European Union, in: Bossong, Raphael (ed.), Terrorismus als Herausforderung der Europäischen Union, Nomos, Baden-Baden, pp. 87-108. , Available at SSRN: https://ssrn.com/abstract=3315400

Tim Krieger (Contact Author)

University of Freiburg - Department of Economics ( email )

University of Freiburg
Wilhelmstr. 1b
Freiburg, D-79085
Germany

HOME PAGE: http://www.wguth.uni-freiburg.de

Daniel Meierrieks

WZB Berlin Social Science Center ( email )

Reichpietschufer
50
Berlin, D-10785
Germany

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