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Threat Perceptions in Europe: Domestic Terrorism and International Crime


  • Syed Mansoob Murshed


This paper focuses on two areas of security concern for the European Union: terrorism and international crime. I present a model of game-theoretic interaction between a European state and a domestic dissident group, who, on occasion, may resort to acts of terrorism. Here, identity is crucial to the putative terrorist, providing the microfoundations of dissident group behaviour by solving the collective action problem. I also sketch a macromodel of drugs production in a conflict-ridden developing country, where I argue that demand-side policies of regulation may be better than policies that are aimed at eradicating supply. As far as the policy implications are concerned, first excessive deterrence against potential terrorists may backfire. Secondly, space needs to be created so that Muslim migrants are able to merge their personal identities within their adopted European homelands. Thirdly, the economic discrimination against Muslims in Europe needs to be redressed. Finally, aid to fragile drug producing states should be broad-based and poverty reducing, not just benefiting warlords.

Suggested Citation

  • Syed Mansoob Murshed, 2009. "Threat Perceptions in Europe: Domestic Terrorism and International Crime," Economics of Security Working Paper Series 2, DIW Berlin, German Institute for Economic Research.
  • Handle: RePEc:diw:diweos:diweos2

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    References listed on IDEAS

    1. Bhagwati, Jagdish N, 1982. "Directly Unproductive, Profit-seeking (DUP) Activities," Journal of Political Economy, University of Chicago Press, vol. 90(5), pages 988-1002, October.
    2. George A. Akerlof & Rachel E. Kranton, 2000. "Economics and Identity," The Quarterly Journal of Economics, Oxford University Press, vol. 115(3), pages 715-753.
    3. Edward L. Glaeser, 2005. "The Political Economy of Hatred," The Quarterly Journal of Economics, Oxford University Press, vol. 120(1), pages 45-86.
    4. Hirshleifer, Jack, 1995. "Anarchy and Its Breakdown," Journal of Political Economy, University of Chicago Press, vol. 103(1), pages 26-52, February.
    5. Tony Addison & Mansoob Murshed, 2005. "Transnational terrorism as a spillover of domestic disputes in other countries," Defence and Peace Economics, Taylor & Francis Journals, vol. 16(2), pages 69-82.
    6. Scott Gates, 2002. "Recruitment and Allegiance," Journal of Conflict Resolution, Peace Science Society (International), vol. 46(1), pages 111-130, February.
    7. S. Murshed, 1992. "Comparing quotas with VERs: A three-region, North-South-NICs macroeconomic analysis," Open Economies Review, Springer, vol. 3(3), pages 255-270, October.
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    Cited by:

    1. Michael Brzoska & Raphael Bossong & Eric van Um, 2011. "Security Economics in the European Context: Implications of the EUSECON Project," Economics of Security Working Paper Series 58, DIW Berlin, German Institute for Economic Research.

    More about this item


    European Security; Conflict; Terrorism; Narcotics Trade;

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances; Revolutions
    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F35 - International Economics - - International Finance - - - Foreign Aid
    • H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government
    • O19 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - International Linkages to Development; Role of International Organizations

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