Chapter 5 demonstrates that states have accepted obligations of mandatory cooperation with respect to a variety of other transboundary harms, including piracy, terrorism, and at least some cyberattacks.

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.

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.

The objective of this chapter is to consider the effect of terrorism on trade. We rely on the existing literature on trade and terrorism and primarily use perfectly competitive models of trade. First, we highlight how terrorism may affect trade by damaging resources and causing general equilibrium reallocations of factors of production. Second, we consider how these trade effects may be altered in the presence of optimal counterterrorism policy. Third, the chapter discusses how trade may affect intra-industry trade in varieties using a monopolistically competitive framework. Finally, we discuss some of the existing empirical literature that has focused on trade-terrorism and FDI-terrorism issues. A central message of our analysis is that while terrorism will likely raise costs and dampen economic activity, whether it will raise or reduce trade of a nation depends on how terrorism affects that nation’s resource reallocation, relative prices and real income level.

We describe the effect that terror has on international tourism flows. Studies yield very different results. We show in our survey that this is due to the perspective taken – specific single attacks versus the entire history of attacks in a country, selected countries versus a comprehensive set of countries – and the time frame under consideration. While high-profile attacks may have large impact effects, on average terror has mild effects that however may be relatively persistent. We survey the most important contributions and point out the relative strengths and difficulties that the different methodological approaches entail.

This chapter provides an overview of the economics of terrorism and social media. Recent advances in the economics of information and economics and psychology help summarize the literature on how terrorism and social media interact. I discuss the implications of the transition from mass media to social media for terrorism in general before describing the impact of social media on the industrial organization of terrorism in particular. I also summarize recent work on the impact of terrorism on social media as well as the economics and psychology of national security have provided some solutions. Overall, social media has been an important part of the industrial organization of terrorism as well as its undoing where progress has been made. What we do not know (but ought to know) include topics such as how social media strengthens or weakens anti-terrorism initiatives given newer developments such as encryption and whether or not terrorist cyber-attacks may increase in importance over time as social media grows in scale.

In this chapter, we explore the scholarly literatures on the effects of liberal democratic governance on the likelihood of terrorist violence, and on the threat posed by terrorist campaigns to liberal democracy.  Most disagreements in these literatures stem from the fact that the reciprocal relationship between democracy and terrorism is highly complex and largely contingent upon structural elements and other characteristics of states and terrorist organizations.  In regard to general institutional structure, we maintain that in offering checks against the majoritarian impulse towards authoritarianism, in subjecting policymaking to institutional competition, and in allowing for the responsible and effective exercise of executive prerogative, presidential democracy offers greater resistance to autocratization in the face of terrorism than parliamentary democracy.  We find empirical support for this proposition in analysis of cross-national time-series data on democratic structural integrity and the maintenance of civil rights and liberties for the period 1970-2012.

This chapter surveys existing work on the connection between religion and terrorism and proposes an alternative theory, the religious utility hypothesis, in which terrorist organizations piggyback on the utility of religion as a source of meaning and belonging. By tying the duty to perform violent acts to an individual’s faith and community, terrorist organizations can (1) elicit costlier sacrifices (e.g. suicide bombing), even when these actions run counter to the actor’s moral convictions, (2) motivate a small group of extreme types to radicalize a larger community, and (3) use moderate religious organizations, which are shielded from monitoring, infiltration and closure due to their value to the community, for recruitment and incubation of more extreme groups.

This chapter shows the evolution and tenuous persistence of white supremacy from the middle of the twentieth century to the present. It begins by analyzing racial terrorism and lynching in the USA. It connects these acts of violence to broader patterns of economic exclusion and political dominance across English-speaking societies. The analysis reveals deep connections between American segregation and Nazi Germany, demonstrating how racist ideologies reinforced each other globally. While civil rights movements achieved significant victories, white power structures adapted through subtler forms of oppression, including discriminatory policing, housing discrimination, and coded political messaging. The chapter shows how anti-colonial and civil rights movements worldwide recognized their common struggle against a global system of white supremacy. The election of Barack Obama marked a crisis point, triggering an intense backlash that culminated in Trump’s presidency and Brexit. These recent manifestations of white nationalism, while politically successful, may represent desperate attempts to preserve a crumbling system rather than signs of strength.

This chapter surveys the empirical evidence on the effect of terror on social cohesion. We report on attitudinal changes towards the minority group to which terrorists are perceived to belong and by that group towards integration. We also discuss evidence of increased discrimination in labor and housing markets and reduced assimilation efforts in the wake of major terror attacks.

Insurance and its related products and instruments plays an important role in the management of risk and potential loss from terrorist attacks. This chapter will introduce the reader to the concept and structure of insurance and how the sector approaches catastrophic risks like terrorism. It will then explore the roles that insurance has, and that different actors play, in the process of insuring against loss caused by terrorism. In order to insure a risk, it must be possible to assess it and to model the potential loss to the insurer. So the process of how insurers assess and model the risk will be laid out. This sets the conditions for the challenges that such modelling faces and treatments of those challenges. The chapter concludes that the process of validation of models is critical to their success and is an excellent area for future research.

Terrorist groups face a wide range of organizational issues. They have to recruit members, raise funds, articulate a political vision, develop operational plans, train personnel, execute attacks, and justify their actions. Unlike most organizations, however, they must do so while remaining as covert as possible, making all the normal challenges of organizational management significantly harder. This chapter reviews the organizational issues that terrorist groups face and that counterterrorist organizations should take into account.

In this paper, we analyze the role of global geopolitical risks (GPRs), including those associated with terror attacks and threats, on the realized volatility of Canada, France, Germany, Italy, Japan, the United Kingdom (UK), and the United States (US), i.e., the G7 countries, over the period 1917 to 2016. For our purpose, we use a time-varying nonparametric panel data model approach, which offers substantial efficiency gains in estimating the relationship in a time-varying manner, while controlling for nonlinearity and cross-sectional interdependencies across economies, unlike a time series-based model. We find that GPRs can decrease or increase volatility contingent on the state of the two variables of concern, with attacks having a stronger impact on volatility than threats. Our results have important implications for investors and policymakers.

This chapter helps readers make sense of the array of activities that can be considered as irregular warfare. As an umbrella term for a particular form of warfare, its methods consist of terrorism, insurgency, revolution, coup d’état and civil war. The chapter compares and contrasts these methods according to the level of resources they employ, their respective centres of gravity, strategic and tactical orientations, mechanism for success and duration. It provides a useful taxonomy for students seeking to better comprehend irregular warfare but narrows down subsequent study to its two most prevalent methods: terrorism and insurgency.

This scenario involves a 42-year-old male presenting to a large academic emergency department following an explosion at an oil refinery. The patient arrives with multiple blast-related injuries, including bilateral perforated tympanic membranes, basilar skull fracture, right-sided pneumothorax, bowel perforation, liver laceration, extremity fractures, and superficial burns. Due to the nature of the incident, the patient requires immediate decontamination before further medical management. Critical interventions include emergent reduction of a right ankle fracture causing neurovascular compromise and chest tube placement for a tension pneumothorax. Additional imaging reveals further traumatic injuries necessitating consultations with trauma, neurosurgery, and orthopedic surgery. The scenario emphasizes the importance of blast injury management, including handling primary, secondary, and tertiary injuries. Team coordination with HazMat and emergency services is essential to ensure patient safety and hospital readiness. The case highlights the need for rapid, organized, and multidisciplinary approaches to handle complex trauma in blast-related incidents.

Uncertainty and disaster lurked despite New Zealand’s remoteness, for danger lay within. In March 2019, mass shootings at two Christchurch mosques shocked the country and the world. New Zealand was supposed to be a peaceful place; it enjoyed a reputation for peace, not violence. Terrorism and mass murder were alien, except for episodes in the colonial New Zealand Wars or the invasion of Parihaka, a forerunner of passive resistance, in 1881.