Understanding Terrorism from an Economic perspective

Terrorism has emerged as a major threat to the contemporary society. Nation States are reliant on their counter-terrorism laws for checking terrorism and deterring terrorists. To understand the effectiveness of these counter terrorism laws, it is important to first understand the behaviour of terrorists, so as to comprehend what actions can dissuade terrorist’s behaviour and decision to propagate violence. This paper will first look at behaviour of terrorist in decision making from an economic perspective, then will try to explore if there are any economic determinant of terrorism and finally, since the cost of terrorism is huge in terms of life, property etc, will discuss the status of counter-terrorism legislations in India. In the study it has been shown that terrorists are rational in decision making. It has also been found that economic determinants are not significant in determining terrorism; however, to a certain extent education does have a positive relation with participation in terrorism. Terrorism has huge cost, and hence it is essential to have counter-terrorist legislations. These legislations provides power to the state to deny operating space to terrorists and their supporters, deter them from carrying out terrorist acts, ensure the basic rights of the people, and uphold the Fundamental Rights enshrined in the Constitution.