The economic consequences of terrorism for the European Union

Tim Krieger and Daniel Meierrieks

No 2019-02, Discussion Paper Series from University of Freiburg, Wilfried Guth Endowed Chair for Constitutional Political Economy and Competition Policy

Abstract: In recent years, a number of major terrorist attacks in EU member states has put the fight against homegrown and international terrorism at the top of the agenda of European policy-makers. This paper analyzes the costs of terrorism in the European Union from both a theoretical and empirical perspective in order to evaluate counter-terrorism policies by comparing their costs and benefits. Two important policy implications can be derived from our exercise. First, individuals' behavioral predispositions typically result in a biased perception of the risk of terrorism leading to too high a demand for counter-terrorism measures relative to what the objective probability of terrorist events suggests. This results in a tendency to favor repressive over preventive measures against terrorism. Second, uncoordinated European policies against terrorism have the potential to undermine the effectiveness of counter-terrorism measures. If there is a justification for the existence of the European Union (which an increasing number of populist parties in Europe seems to doubt), then it is to provide supranational answers to coordination failure in European counter-terrorism policies.

Keywords: terrorism; home-grown terrorism; European Union; counter-terrorism policies; coordination failure; behavioral responses to terrorism (search for similar items in EconPapers)
JEL-codes: D74 H56 N44 (search for similar items in EconPapers)
Date: 2019
New Economics Papers: this item is included in nep-eec
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:zbw:wgspdp:201902

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