The Contribution of Economic Methodology to our Understanding of Terrorism

Abstract

Recently several studies have used economic methodology to interpret and analyze terrorists behavior. This interdisciplinary endeavor is aimed at shedding as much light as possible on measures to eliminate one of the most dangerous problems facing the next decade. The paper suggests a set of policy measures to combat terrorism based on the findings coming out of the studies that have applied economic methodology to this issue. In developing the anti-terrorism policy agenda, the paper highlights the theoretical issues, methodologies and results of studies that have used choice and game theoretic approaches, the economic theory of bargaining, the economics of crime and punishment, spectral, cross spectral and interrupted time series analysis to examine terrorists behavior. The article concludes by suggesting a plan for future research.