Handbook on the Economics of Conflict
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Handbook on the Economics of Conflict

Edited by Derek L. Braddon and Keith Hartley

The Handbook on the Economics of Conflict conveys how economics can contribute to the understanding of conflict in its various dimensions embracing world wars, regional conflicts, terrorism and the role of peacekeeping in conflict prevention.
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Chapter 7: Characteristics of Terrorism

Karen Pittel and Dirk Rübbelke


* Karen Pittel and Dirk Rübbelke 7.1 INTRODUCTION Many contributions to the literature on international terrorism postulate that there is some rationality associated with terrorist activity; hence, rational choice theory is applicable. Frequently, rational behaviour is attributed to the terrorist organization, for example, as represented by its leaders. Pape (2003, p. 344), who analyses suicide terrorism, argues: ‘Even if many suicide attackers are irrational or fanatical, the leadership groups that recruit and direct them are not.’ And Lapan and Sandler (1988) investigate a bargaining situation between two agents: the terrorist group and the government. The terrorist organizations or their leaders do not only have to develop strategies for conducting strikes (for example, to make decisions on the execution of suicide attacks), but their duties go beyond. As Schelling (1991, p. 23) stresses: ‘whereas individual acts of terrorism may be easily within the capabilities of quite ordinary individuals, a sustained campaign on any scale may require more people and more organization than could be viable in most countries’. Organizations’ leaders have to manage the whole terrorist group, like an entrepreneur manages his company, and this includes such basic duties such as the acquisition of funds or the recruitment of supporters. The management of, for example, fund-raising requires comprehensive skills and also strategic planning.1 The analysis at the organizational level has some appeal: the organization provides guidance and infrastructure to its supporters who in turn will execute strikes. As Coase (1937, p. 392) in his analysis of the nature of the firm...

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