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Appeasing Nihilists? Some Economic Thoughts on Reducing Terrorist Activity

22 Pages Posted: 21 May 2005  

Jan Schnellenbach

BTU Cottbus-Senftenberg, Institute for Economics, Chair for Microeconomics; Walter Eucken Institute

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Date Written: May 20, 2005

Abstract

Recent contributions to the economics of terrorism have given contradicting recommendations for campaigning against terrorism, from the proposal to deprive terrorists of their resources to the proposal of raising the opportunity costs of terrorism by increasing the wealth of the affected regions. Within a simple framework which differentiates between the decision to become an active terrorist and the decision to support terrorists and which allows for reciprocal reactions to anti-terrorism policies, it is argued here that undifferentiated deterrence may indeed backfire, but so may an increase of the opportunity costs of terrorism. A very targeted anti-terrorism policy aimed only at active terrorists would then be the most reasonable remaining approach.

Keywords: terrorism, deterrence, reciprocity, anti-terrorism policies

JEL Classification: H56, K14

Suggested Citation

Schnellenbach, Jan, Appeasing Nihilists? Some Economic Thoughts on Reducing Terrorist Activity (May 20, 2005). Available at SSRN: https://ssrn.com/abstract=726807 or http://dx.doi.org/10.2139/ssrn.726807

Jan Schnellenbach (Contact Author)

BTU Cottbus-Senftenberg, Institute for Economics, Chair for Microeconomics ( email )

Erich-Weinert-Str. 1
Cottbus, 03046
Germany

HOME PAGE: http://https://www.b-tu.de/fg-vwl-mikro/team/prof-dr-jan-schnellenbach

Walter Eucken Institute ( email )

Goethestr. 10
Freiburg, 79100
Germany

HOME PAGE: http://www.eucken.de

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