The Economics of Terrorism from a Policy-Makers Perspective

This paper introduces a brief framework on the political decision-making process in the context of terrorism. It relates the trade-offs policy-makers are faced with to the economic terrorism literature. Past years have shown a steady increase in theoretical and empirical contributions. However, the major part of the empirical advances is on the economic effects of terrorism, its origins, and drivers. More analysis is needed on public perceptions, responses to both the threat of terrorism and policy measures, as well as the costs of anti-terrorism measures. This would improve our understanding of the impact of terrorism on political and economic development.