Terrorism: Deterrence May Backfire

Zurich IEER Working Paper No. 136

26 Pages Posted: 4 Apr 2003

See all articles by Bruno S. Frey

Bruno S. Frey

CREMA; University of Basel

Simon Luechinger

University of Lucerne

Date Written: August 2002


Present anti-terrorist policy concentrates almost exclusively on deterrence. It seeks to fend off terrorism by raising the cost of undertaking terrorist acts. This paper argues that deterrence policy is less effective than generally thought and induces in some cases even more terrorism. This is, in particular, the case if deterrence policy induces a centralisation of decision-making in the polity and economy. Therefore, an effective anti-terrorist policy should focus more on reducing the expected benefits of terrorist acts to prospective terrorists. Such a policy is based on strengthening rather than weakening decentralised decision-making.

Keywords: Terrorism, Deterrence, Decentralization, Democracy, Federalism, Market Economy, Rational Choice, Motivation

JEL Classification: D74, F00, H56, K42

Suggested Citation

Frey, Bruno S. and Luechinger, Simon, Terrorism: Deterrence May Backfire (August 2002). Zurich IEER Working Paper No. 136, Available at SSRN: https://ssrn.com/abstract=359823 or http://dx.doi.org/10.2139/ssrn.359823

Bruno S. Frey (Contact Author)

CREMA ( email )

Südstrasse 11
Zurich, CH 8008
+41 44 380 00 78 (Phone)

University of Basel ( email )

Peter Merian-Weg 6
Basel, 4002

Simon Luechinger

University of Lucerne ( email )

Frohburgstrasse 3
P.O. Box 4466
Lucerne, 6002

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