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Appeasing Nihilists? Some Economic Thoughts on Reducing Terrorist Activity

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Jan Schnellenbach (Philipps-University Marburg)

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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.

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Paper provided by EconWPA in its series Law and Economics with number 0507001.

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Date of creation: 01 Jul 2005
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Handle: RePEc:wpa:wuwple:0507001

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H56 - Public Economics - - National Government Expenditures and Related Policies - - - National Security and War

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  1. Axel Dreher & Justina A.V. Fischer, 2008. "Decentralization as a disincentive for transnational terror? An empirical test," University of St. Gallen Department of Economics working paper series 2008 2008-01, Department of Economics, University of St. Gallen. [Downloadable!]
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  2. Axel Dreher & Justina A. V. Fischer, 2009. "Government decentralization as a disincentive for transnational terror? An empirical analysis," Diskussionspapiere aus dem Institut für Volkswirtschaftslehre der Universität Hohenheim 313/2009, Department of Economics, University of Hohenheim, Germany. [Downloadable!]
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