Terrorist Financing and Money Laundering
AbstractTerrorism causes enormous costs to society. Since the 9/11 attacks, the “war on terror” has therefore been an important challenge to all civilized countries. In the present contribution we analyze the root causes and costs of terrorist activity, thereby setting the stage for discussing the need for measures against terrorist financing. We argue that running a terrorist organization requires substantial financial resources which are transferred to the groups through clandestine and often illegal channels. Anti-money laundering policies may appear useful measures to stop transfers to terrorist groups; however, they are not sufficient means to deal with all facets of terrorist financing. Compared to similar activities of organized crime, terrorist financing involves “reverse” money laundering. This is a consequence of some fundamental differences between terrorism and organized crime, which also lead to different implications in terms of choosing appropriate counter-measures.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by University of Paderborn, CIE Center for International Economics in its series Working Papers with number 40.
Length: 26 pages
Date of creation: Jun 2011
Date of revision:
Contact details of provider:
Postal: Warburger Str. 100, 33098 Paderborn
Web page: http://www.uni-paderborn.de/fakultaeten/wiwi/department4/cie/
More information through EDIRC
terrorist financing; causes and costs of terrorism; money laundering; organized crime vs. terrorism; anti-terrorist financing policies;
Find related papers by JEL classification:
- K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law
- H56 - Public Economics - - National Government Expenditures and Related Policies - - - National Security and War
- D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances
This paper has been announced in the following NEP Reports:
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.:
- Lindelauf, R. & Borm, P.E.M. & Hamers, H.J.M., 2009. "Understanding Terrorist Network Topologies and Their Resilience Against Disruption," Discussion Paper 2009-85, Tilburg University, Center for Economic Research.
- Alberto Abadie, 2006.
"Poverty, Political Freedom, and the Roots of Terrorism,"
American Economic Review,
American Economic Association, vol. 96(2), pages 50-56, May.
- Alberto Abadie, 2004. "Poverty, Political Freedom, and the Roots of Terrorism," NBER Working Papers 10859, National Bureau of Economic Research, Inc.
- Abadie, Alberto, 2004. "Poverty, Political Freedom, and the Roots of Terrorism," Working Paper Series rwp04-043, Harvard University, John F. Kennedy School of Government.
- Dreher, Axel & Gassebner, Martin, 2008. "Does political proximity to the U.S. cause terror?," Economics Letters, Elsevier, vol. 99(1), pages 27-29, April.
- Tavares, Jose, 2004. "The open society assesses its enemies: shocks, disasters and terrorist attacks," Journal of Monetary Economics, Elsevier, vol. 51(5), pages 1039-1070, July.
- Geert Bekaert & Campbell R. Harvey & Christian Lundblad, 2001.
"Does Financial Liberalization Spur Growth?,"
NBER Working Papers
8245, National Bureau of Economic Research, Inc.
- Abadie, Alberto & Gardeazabal, Javier, 2008.
"Terrorism and the world economy,"
European Economic Review,
Elsevier, vol. 52(1), pages 1-27, January.
- Tim Krieger & Daniel Meierrieks, 2011.
"What causes terrorism?,"
Springer, vol. 147(1), pages 3-27, April.
- Alberto Abadie & Javier Gardeazabal, 2003. "The Economic Costs of Conflict: A Case Study of the Basque Country," American Economic Review, American Economic Association, vol. 93(1), pages 113-132, March.
- Drakos, Konstantinos & Kutan, Ali M., 2001. "Regional effects of terrorism on tourism: Evidence from three Mediterranean countries," ZEI Working Papers B 26-2001, ZEI - Center for European Integration Studies, University of Bonn.
- Ferwerda Joras, 2009.
"The Economics of Crime and Money Laundering: Does Anti-Money Laundering Policy Reduce Crime?,"
Review of Law & Economics,
De Gruyter, vol. 5(2), pages 903-929, December.
- Joras Ferwerda, 2008. "The Economics of Crime and Money Laundering: Does Anti-Money Laundering Policy Reduce Crime?," Working Papers 08-35, Utrecht School of Economics.
- Axel Dreher & Martin Gassebner & Lars-H. R. Siemers, 2007.
"Does Terror Threaten Human Rights? Evidence from Panel Data,"
CESifo Working Paper Series
1935, CESifo Group Munich.
- Axel Dreher & Martin Gassebner & Lars-H. R. Siemers, 2007. "Does Terror Threaten Human Rights? Evidence from Panel Data," KOF Working papers 07-156, KOF Swiss Economic Institute, ETH Zurich.
- Michael Brzoska, 2009. "Zur Wirksamkeit von Finanzsanktionen als Instrument im Kampf gegen den Terrorismus," Vierteljahrshefte zur Wirtschaftsforschung / Quarterly Journal of Economic Research, DIW Berlin, German Institute for Economic Research, vol. 78(4), pages 88-100.
- Berrebi Claude, 2007. "Evidence about the Link Between Education, Poverty and Terrorism among Palestinians," Peace Economics, Peace Science, and Public Policy, De Gruyter, vol. 13(1), pages 1-38, December.
- Eckstein, Zvi & Tsiddon, Daniel, 2004.
"Macroeconomic consequences of terror: theory and the case of Israel,"
Journal of Monetary Economics,
Elsevier, vol. 51(5), pages 971-1002, July.
- Eckstein, Zvi & Tsiddon, Daniel, 2004. "Macroeconomic Consequences of Terror: Theory and the Case of Israel," CEPR Discussion Papers 4427, C.E.P.R. Discussion Papers.
- Thomas Gries & Tim Krieger & Daniel Meierrieks, 2009.
"Causal Linkages Between Domestic Terrorism and Economic Growth,"
20, University of Paderborn, CIE Center for International Economics.
- Thomas Gries & Tim Krieger & Daniel Meierrieks, 2011. "Causal Linkages Between Domestic Terrorism and Economic Growth," Defence and Peace Economics, Taylor and Francis Journals, vol. 22(5), pages 493-508, June.
- Tim Krieger & Daniel Meierrieks, 2009.
"Terrorism in the Worlds of Welfare Capitalism,"
22, University of Paderborn, CIE Center for International Economics.
- Gary S. Becker & Yona Rubinstein, 2011. "Fear and the Response to Terrorism: An Economic Analysis," CEP Discussion Papers dp1079, Centre for Economic Performance, LSE.
- Enders, Walter & Sandler, Todd, 1996. "Terrorism and Foreign Direct Investment in Spain and Greece," Kyklos, Wiley Blackwell, vol. 49(3), pages 331-52.
- Bruno Frey & Simon Luechinger & Alois Stutzer, 2009. "The life satisfaction approach to valuing public goods: The case of terrorism," Public Choice, Springer, vol. 138(3), pages 317-345, March.
- Efraim Benmelech & Claude Berrebi, 2007. "Human Capital and the Productivity of Suicide Bombers," Journal of Economic Perspectives, American Economic Association, vol. 21(3), pages 223-238, Summer.
- Graham Bird & S. Brock Blomberg & Gregory D. Hess, 2008. "International Terrorism: Causes, Consequences and Cures," The World Economy, Wiley Blackwell, vol. 31(2), pages 255-274, 02.
- Nitsch, Volker & Schumacher, Dieter, 2004. "Terrorism and international trade: an empirical investigation," European Journal of Political Economy, Elsevier, vol. 20(2), pages 423-433, June.
- Atin Basuchoudhary & William Shughart, 2010. "On Ethnic Conflict And The Origins Of Transnational Terrorism," Defence and Peace Economics, Taylor and Francis Journals, vol. 21(1), pages 65-87.
- Nicole Crain & W. Crain, 2006. "Terrorized economies," Public Choice, Springer, vol. 128(1), pages 317-349, July.
- repec:diw:diwdiw:diwepb7 is not listed on IDEAS
- Michael Brzoska, 2011. "Counter-Terrorist Financing: A Good Policy Going too Far?," EUSECON Policy Briefing 7, DIW Berlin, German Institute for Economic Research.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (FB5-Info).
If references are entirely missing, you can add them using this form.