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A Survey on the Economics of Security: Final Report for the European Commission, Directorate-General for Justice, Freedom and Security


  • Tilman Brück
  • Marie Karaisl
  • Friedrich Schneider


This report assesses the literature on the inter-relations between the economy and security with particular focus on terrorism and the "human drivers of insecurity" to identify both available knowledge and crucial research gaps. In addition, the report surveys the European research capacity in the field of security economics. The study is based on a thorough literature survey of the newly emerging field of security economics, using a variety of electronic catalogues and search engines as sources. The study reveals that it is not just terror attacks but also security measures of private and public agents responding to the threat of terrorism that incur significant repercussions for the economy, often with trans-national consequences. Impacts vary with the maturity of an economy; appropriate ex ante and ex post policies are critical to contain the damage of terrorism. Given the dynamic nature of human-induced insecurity, policies should place emphasis on "systemic resilience". Gaps in the economic security literature include insufficient knowledge of the behaviour of terrorists and their targets. Furthermore, the global impacts of terror attacks and especially of security measures require more analysis. Future research requires a more rigorous conceptual framework, methodological improvements and, above all, better data. In comparison to the United States, the current research capacity in security economics in Europe is weak. On the one hand, there is significant research potential in the field of security economics within the European Union in the shape of several high quality researchers. On the other hand, the existing research infrastructure and institutional barriers both inhibit this potential from being developed academically and for policy advice. Establishing a European network of security economists and funding a European centre for security economics could contribute to remedy this situation.

Suggested Citation

  • Tilman Brück & Marie Karaisl & Friedrich Schneider, 2008. "A Survey on the Economics of Security: Final Report for the European Commission, Directorate-General for Justice, Freedom and Security," DIW Berlin: Politikberatung kompakt, DIW Berlin, German Institute for Economic Research, volume 41, number pbk41.
  • Handle: RePEc:diw:diwpok:pbk41
    Note: VI, 114 p.

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    References listed on IDEAS

    1. 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.
    2. Walkenhorst, Peter & Dihel, Nora, 2002. "The Impact of the Terrorist Attacks of 11 September 2001 on International Trading and Transport Activities," MPRA Paper 12277, University Library of Munich, Germany.
    3. Sunstein, Cass R, 2003. "Terrorism and Probability Neglect," Journal of Risk and Uncertainty, Springer, vol. 26(2-3), pages 121-136, March-May.
    4. Sandler, Todd & Enders, Walter, 2004. "An economic perspective on transnational terrorism," European Journal of Political Economy, Elsevier, vol. 20(2), pages 301-316, June.
    5. Jhy-Yuan Shieh & Jhy-Hwa Chen & Juin-Jen Chang & Ching-Chong Lai, 2005. "Terrorist Threats And Transitional Dynamics In An Overlapping Generations Model," Defence and Peace Economics, Taylor & Francis Journals, vol. 16(6), pages 415-425.
    6. Viscusi, W Kip & Zeckhauser, Richard J, 2003. "Sacrificing Civil Liberties to Reduce Terrorism Risks," Journal of Risk and Uncertainty, Springer, vol. 26(2-3), pages 99-120, March-May.
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    Cited by:

    1. Brauer1, Jurgen & Haywood, Robert, 2010. "Non-state Sovereign Entrepreneurs and Non-territorial Sovereign Organizations," WIDER Working Paper Series 009, World Institute for Development Economic Research (UNU-WIDER).

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