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Terrorism, Trade and Public Policy

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Author Info
James E. Anderson () (Boston College)

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Abstract

Are bigger markets safer? How should government policy respond to terrorist threats? Trade draws potential terrorists and economic predators into productive activity, but trade also draws terrorist attacks. Larger trade reduces the risk of terrorist attack when the wage elasticity is high, associated with low ratios of predators to prey and high wages; but it may increase the risk of terrorist attack when the wage elasticity is low, associated with high ratios of predators to prey. Anti-terrorist trade policy should always promote trade in simultaneous play. Government first mover advantage and inelastic wage may imply trade restriction. Tolerance of smuggling may improve security. Better enforcement should ordinarily be provided for bigger, inherently safer and higher wage markets.

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File URL: http://fmwww.bc.edu/EC-P/WP701.pdf
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Publisher Info
Paper provided by Boston College Department of Economics in its series Boston College Working Papers in Economics with number 701.

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Date of creation: 01 Dec 2008
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Handle: RePEc:boc:bocoec:701

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Related research
Keywords: terrorism; trade; policy; predation; smuggling;

Other versions of this item:

Find related papers by JEL classification:
F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
O17 - Economic Development, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements
K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Anderson, James E. & Bandiera, Oriana, 2006. "Traders, cops and robbers," Journal of International Economics, Elsevier, vol. 70(1), pages 197-215, September. [Downloadable!] (restricted)
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  2. Alan B. Krueger & Jitka Maleckova, 2003. "Education, Poverty and Terrorism: Is There a Causal Connection?," Journal of Economic Perspectives, American Economic Association, vol. 17(4), pages 119-144, Fall. [Downloadable!] (restricted)
  3. James E. Anderson, 2008. "Commercial Policy in a Predatory World," Boston College Working Papers in Economics 703, Boston College Department of Economics. [Downloadable!]
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  4. Mirza, Daniel & Verdier, Thierry, 2006. "International trade, security, and transnational terrorism : theory and empirics," Policy Research Working Paper Series 4093, The World Bank. [Downloadable!]
    Other versions:
  5. Mirza, Daniel & Verdier, Thierry, 2006. "Are lives a substitute for livelihoods ? Terrorism, security, and U.S. bilateral imports," Policy Research Working Paper Series 4094, The World Bank. [Downloadable!]
    Other versions:
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This page was last updated on 2009-11-24.

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