A Microeconomic Analysis on Terrorism and Anti-terror Policies

테러와 테러정책에 대한 미시경제학적 분석

This paper provides a simple microeconomic model of terrorist attcks and anti-terrorism policies. The terrorists can be characterised as rational actors, choosing between legal activities and terrorist activities to promote their political goals. Since their resources are limited, one can think of anti-terrorist policies by examining how such policies affect the objectives and constraints of terrorists. Deterrence policy seeks to reduce terrorist attacks by raising the cost of undertaking terrorist acts. Proactive policy aims at preventing attacks by destroying terrorists' resources (fund, personnel, leadership). This paper suggests another type of anti-terrorist policy which is to reduce the benefits of (or in other words, raising the opportunity costs of) terrorist acts. Such a policy is based on decentralisation in political decision-making and economic power.