Since the turn of the century, few issues have shaped political debate and policy-making more than terrorism. As a result, there has been a huge increase in the amount of academic research devoted to investigating the causes and consequences of terrorism. The Cambridge Handbook on the Economics of Terrorism is the first to present a state-of-the art survey of the economics of terrorism. It adopts a rational-choice perspective, according to which terrorists are viewed as rational economic actors, and presents a framework for analyzing the causes and consequences of terrorism. It explores the causes and consequences of terrorism and shines a light on practical counter-terrorism policies and their trade-offs. With contributions from many leading figures in this fast-growing and important field, this book offers an accessible yet comprehensive collection of the economic analysis of terror.

The first chapter presents the central puzzle in the emerging jurisprudence about government pension benefits that this book seeks to solve. It explains how public sector pensions face persistent demographic upheaval and financial fragility amid a turbulent political context. With limited choices in how to shore up failing pension plans, state and local governments have been enacting legislation to trim pension benefits. Current and former government employees have challenged such reforms in state and federal courts across the United States. Focusing on the extent that pension benefits are contractual obligations protected under state and U.S. Contract Clauses as well as state Pension Clauses, this book furnishes a timely analytical lens for comprehending these contemporary constitutional controversies.

This chapter reviews the theoretical and empirical literature on the adverse macroeconomic consequences of terrorism. From a theoretical perspective, terrorism may discourage economic activity by adversely affecting capital accumulation and allocation as well as social trust and political institutions. A selective review of the empirical literature on the macroeconomic consequences of terrorism shows that terrorism is associated with reduced economic performance in studies that use sub-national, national and cross-national data. Estimated effects are usually modest but tend to be more severe in terrorism hotspots and in countries that are especially vulnerable to terrorism. A country’s resilience to terrorism’s negative economic effects is governed by a variety of factors, including a country’s economic size, its level of economic diversification and quality of market institutions. Finally, this chapter calls for further research to explore additional pathways through which terrorism affects economic performance and to identify factors influencing its impact heterogeneity, while also highlighting the importance of accounting for econometric pitfalls in such analyses to provide robust policy recommendations.

This chapter examines how terrorism can affect the public finances. The literature identifies three main ways in which terrorism can affect fiscal outcomes. First, by influencing real economic activity and, thereby, government revenues, fiscal deficits and public debt. Second, by negatively affecting both the tax base and the efficiency of the tax administration. Third, by changing the composition of government spending in favor of military outlays. We confirm the importance of these three channels through new research on the impact of major terrorism shocks on macroeconomic and fiscal variables´ dynamics using an unbalanced panel of 191 heterogeneous countries from 1970 to 2018. We find that a terrorist shock lowers a country’s real GDP as well as government tax revenues and raises the debt-to-GDP ratio. The composition of government spending shifts in favor of military spending. Low-income countries are affected more than both emerging market and advanced economies.

The argument in this chapter is that although US fishery regulation eventually bolstered stocks, the regulatory process was complex and slow, driven by costly rent-seeking. Economic theory had long described solutions to open-access fisheries. Templates existed for application of tradable use rights and potentially for user determination of annual harvest caps. Nevertheless, traditional prescriptive controls, even under regional councils, were maintained for twenty years before use rights as individual tradable quotas were adopted. Those use rights were influenced by rent-seeking objectives that limited access and alienability. These are examples of restricting entry and raising rivals’ costs.

The chapter examines the operation of cloud technologies within the system of international investment law. It analyses the operation of cloud technologies themselves within the system of international investment law and the interaction between the regulation of cloud technologies and international investment protective standards. The common element in each analysis is the existence, inexistence, and eventually forceful existence of territorial nexus between the ‘cloud’ and the national jurisdictions. Amidst the increased regulatory interference, the chapter focuses on localization requirements and forced localizations as a medium through which fundamental territorial and extra-territorial implications of international investment law are assessed. In essence, it constitutes a crash test on the capacity of existing international investment norms to protect and regulate assets and investments that are inherently detached from traditional views of territorial jurisdiction or tangible property rights.

The fourth chapter provides an examination of substantive canons that judges use to interpret government pension legislation under the Contract Clause. It concentrates on three clashing canons routinely employed in pension law: the remedial (purpose) canon, the “no contract” canon (otherwise known as the unmistakability doctrine), and the constitutional avoidance canon. Courts are at a crossroads in selecting among these dueling canons to determine public pension contractual obligations. This canon warfare is often outcome-determinative, insofar as it normally answers the question of whether there is a contract. Capturing conflicting interpretative strategies allows for an in-depth exploration of the policies in pension reform litigation and develops a better appreciation of the responsibilities of courts, legislatures, and society. The investigation also fosters an informed dialogue over the choice of canons and the circumstances of their operation in the ongoing legal battles about restructuring pension obligations.

Policy programs on anti-money laundering (AML) and combating the financing of terrorism (CFT) can only be successful if one has detailed knowledge about the financial means of terrorism. In this survey chapter, I analyze the extent of terrorist financing and discuss the legal as well as illegal origins of their financial sources. I also show the costs of terrorist attacks and the similarities as well as dissimilarities between terrorist and criminal organizations.

Economists have been applying existing economic tools to the study of terrorism. This approach assumes that terrorists are rational actors who can be deterred, reacting logically to the constraints placed upon them. This framework offers a comprehensive, adaptable, and testable methodology.

This Chapter conceptualizes security exceptions under international trade and investment agreements. In particular, it seeks to construct the chain that links trade and security-related issues arising from the application of security measures by clarifying the concept of national security to be used for the book, revisiting the current role of international organizations in balancing free trade and national security, ie the UN and the WTO, and finally contemplating the decision to incorporate security exceptions into international economic agreements or the decision to adopt security measures through the lenses of economic contract theory, the theories of international relations, such as realism, institutionalism, and constructivism, and the concept of securitization.

Net-zero energy transition requires a paradigm shift that entails multiple and simultaneous transitions of different sociotechnical systems and swift, radical, and active pushes by many key societal actors. Commitments to net-zero emissions have reinforced the momentum for climate action and widened the inclusion of sectors involved. In particular, the financial sector is expected to reinforce the momentum by changing portfolios, institutions and business models. Against this backdrop, this book tackles multiple transitions in finance and energy systems to explore how such transitions might overcome coal lock-ins. This chapter elaborates on how finance and energy sectors have responded to commitments to net-zero emissions within and across sectors and have been pressured to undergo system transformation. The chapters presents an overview of the opportunities and risks of two bridging technologies – natural gas and transition finance – and raises the book’s two research questions: why the Paris–Glasgow financial regime for financing net zero has been slow in progress, and why highly coal-dependent small EMDEs are attracted to the shift to natural-gas-based electricity systems instead of those based on renewable energy sources. The chapter’s conclusion presents the structure of the book, abstracts of the chapters, and scholarly contributions.

China’s notion of cyber sovereignty reflects an assertive extension of state authority into the digital realm. Rooted in principles of territorial jurisdiction, national security, and technological independence, this framework is embodied in key legislation. These laws impose rigorous compliance obligations on foreign and domestic businesses, particularly those operating critical information infrastructure. While these measures reinforce China’s digital autonomy, they pose significant challenges for foreign investors navigating this intricate regulatory landscape. This chapter critically examines how China’s cyber sovereignty aligns with its international investment obligations, focusing on three core principles: protection against expropriation, national treatment, and fair and equitable treatment (FET). It explores whether the stringent requirements and lack of effective remedies breach these standards, highlighting potential areas of discord with China’s investment treaties. Furthermore, it evaluates the limitations of security and general exception clauses in justifying these regulatory measures under international law. The findings suggest that China’s cyber sovereignty framework, while advancing its domestic security and technological goals, may conflict with its international investment commitments. As more nations adopt similar regulatory stances, this trend could signal a shift toward a fragmented global ICT market, reshaping the dynamics of international economic governance.

Alongside global climate financial mechanisms such as the Green Climate Fund (GCF), global net-zero finance initiatives such as the Energy Transition Mechanism (ETM) and the Just Energy Transition Partnership (JETP) were launched. These mechanisms aim to mobilise private financing for early retirements of fossil fuel facilities in emerging markets and in developing economies that rely heavily on fossil fuels. However, few studies have assessed them from the perspective of equity, justice, and transformative changes. This chapter fills the gap by investigating how effectively these financial mechanisms have worked for net-zero transitions. Our findings reveal that while the mandates and requirements direct ETM and JETP for early retirement of coal power, compensation, and institutional development, few programmes have been specified for disbursement. Long procedures and institutional reform requirements delay disbursements, challenging private financing and scaling. This contrasts with GCF, which focuses on energy access and renewable energy but accelerates disbursement. Transparent collaborations between developed countries, private investors, host country governments, and electric companies are suggested for ETM and JETP to make financing net-zero transitions work effectively.

This Chapter outlines the national legal frameworks for applying security measures by the US, the EU, and BRICS in order to understand the level of securitization of their policy objectives. It focuses on the measures that are or can be applied by the US, the EU, and BRICS in pursuit of their national (regional) security interests and, thus, potentially subjected to security exceptions under international law. Specifically, this Chapter discusses the practice of application of economic sanctions and investment screening mechanisms in those jurisdictions.

The chapter surveys various papers in the literature that specifically analyze deterrence and preemption policies from the perspective of game theory. Emphasis is given to certain classes of models in order to highlight key aspects and characteristics of the policies studied. For example, when countries engage in deterrence against terrorist organizations, it is likely that they may simply deflect terrorist attacks to other countries. Preemptive policies on the other hand, provide positive benefits to other countries and therefore any benefits stemming from this policy, may be underprovided due to the problem of free riding.

In this chapter, we explore the rational choice approach to terrorism, combining viewpoints from political economy, organizational behavior, and individual psychology. We therefore examine terrorism as a strategic option chosen under certain socio-economic and political constraints, evaluating how aspects like market forces, organizational tactics, and individual incentives influence the phenomenon.