Rational Terrorists

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Rational Terrorists

• How Terrorist Organizations Employ Economic
  Principles to Conduct their Beastly Business

Jurgen Brauer Professor of Economics College of
Business Administration Augusta State University,
Augusta, GA www.aug.edu/sbajmb 20 April 2006
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Rational Terrorists

• Transnational terrorism
• The terrorist
• The terrorist organization

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Rational Terrorists

• Whats rational?
• The interaction between terrorism and
  counter-terrorism
• The rational terrorist organization
• Counter-terrorist policy

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Rational Terrorists

• Given their beliefs
• terrorists choose
• subject to constraints

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Rational Terrorists

• Three questions
• 1. What hurdles can be placed in my way?
• 2. How best to respond to the hurdles?
• 3. What difficulties does my opponent have?

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Rational Terrorists

• The hurdles
• 1. decrease revenue
• 2. increase cost
• Logically equivalent both are a tax on terror

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Rational Terrorists

• Two problems for counter-terrorism
• 1. government must consider its own expense in
  implementing counter-terrorist measures
• 2. counter-terrorism must anticipate tax
  evasion measures by terror organizations

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Rational Terrorists

• Tax evasion measures
• 1. change revenue source
• 2. change the place of production
• 3. change the time of attacks
• 4. change the efficiency of attacks
• 5. change the product mix
• 6. invent new products/targets
• 7. change the risk-profile
• 8. change to clustered activity

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Rational Terrorists

• Overriding message counter-terrorist tax
• breeds innovation
• breeds substitution
• breeds efficiency

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Rational Terrorists

• Asymmetries
• Terror organizations Targeted governments
• target poor target rich
• long-term time horizon short-term time horizon
• agree on common enemies dont agree on common
  enemies
• small size furthers common large size hampers
  interest common interest
• luck need only once luck needed always
• Source excerpt from Enders/Sandler (2006, p. 144)

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Rational Terrorists

• Counter-terrorist policy
• Offensive measures
• and Defensive measures
• possess different properties

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Rational Terrorists

• Counter-terrorism
• 1. everything, everywhere, all the time
• 2. beware of substitution
• 3. the terror isoquant
• 4. offer non-violent options
• 5. the role of the media
• 6. compel cooperation

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Rational Terrorists
Enders, W. and T. Sandler, The Political Economy
of Terrorism. Cambridge, UK Cambridge University
Press, 2006.
Thank you Time for Q A J. Brauer -
www.aug.edu/sbajmb