Utility maximisation, substitutional/complementary effects, and cost versus benefit analyses, are underpinned by the principle of rationality, and used as theoretical constructs by neo-classical economists to analyse the behaviour of terrorists.
Alan B. Krueger & Maleckova, utilise the principles of utility maximisation to delineate the participative mechanisms concerning terrorist behaviour. Todd Sandler, Walter Enders & Harvey E. Lapan, make use of “choice theoretic” paradigms, in which they posit the principles of rationality that terrorist groups are bound by.Walter Enders & Todd Sandler attempt to propose other “choice theoretical considerations”. Substitutional and complementary effects of the various modes of terrorist attack are presented, pursuant to our understanding of terrorists/terrorist groups, being rational, goal-orientated agents. The purpose of this discussion is to outline the theoretical tools used by orthodox economists, the policy recommendations following those tools and comparing and contrasting whether the tools actually analyse the causes of terrorism.
The paper by Krueger & Maleckova analyses the participative mechanisms involved in terrorist behaviour. Assuming parallels between crime and terrorism, they seek to utilise the studies of Gary Becker (“Crime and Punishment: An Economic Approach” – 1968) to emphasise how individuals ought to decide between illegal and legal activties by deciding which activties would bring about the most satisfaction, and hence would produce the greatest utility.They use this theoretical construct to draw similarities between criminal behaviour and terrorist behaviour. Furthermore they state using the studies of four economists, Landes (1878), Sandler, Tschirhart and Cauley (1983), that the participation of individuals in terrorist acts is largely dependent on the “differential payoff” – the difference the benefits of terrorist activities and costs or penalties involved in carrying out that terrorist activity (Krueger, Maleckova; 2003, 122 ).
The “choice theoretical” models put forward by Sandler, Enders & Lapan in their paper, consdier terrorist groups to be rational entities – rational not because of their desired ends but due to their reactions to the constraints placed on them due to a scarcity of resources. The paper depicts terrorist groups to be economic agents who “mazximise beneficial returns and minimise costs”, by opting to choose the lowest per-unit cost out of the various modes of attack available (sky-jacking, bombings, kidnamppings etc).Finally, (Enders, Sandler; 1993, 830-831), address the substitutional and complementary variations that terrorists can resort to for the “consumption of basic commodities”. By “basic commodities” Enders & Sandler are referring to the benefits gained from terrorist tactics.
Various modes of attack or “substitution possibilities” may be employed as long as similar commodities are consumed and hence maximum utility is obtained. The concept of complementarity is seen as a measure that is undertaken when the amalgamation of various modes of terrorist attack adds greatly to the additional output of consuming basic commodities.Moreover, it is postulated that, terrorists are rational decision-makers who must choose due to resource contraint. The three decisions to be made are: choosing “between terrorist and non-terrorist activities”, depending on the relative costs; choosing “between different terrorist tactics”, again dependent on substitutional possibilities and income; choosing “between different non-terrorist activities” (Enders, Sandler; 1993, 830). From this understand the authors go on to infer valuable information.They proposed four derivations (two of which have been addressed by the previous theoretical analyses, which I shall leave out): 1) If there were an increase/decrease in “price of one complementary event” then all the related complementary events would fall in number.
2) a rise in amount of resources would foment more terrorist activity & a fall in resources would stymie the frequency of terrorist activity – this is the case for normal goods (Enders, Sandler; 1993, 831).Drawing conclusions from their theoretical analyses of terrorist activities and terrorist related behaviour, Sandler, Lapan & Walters, outline some policy recommendations/suggestions. They suggest governments should closely examine the economic benefits Vs the economic costs of employing passive (“technology based barriers”; “fortifying potential targets” etc) and active (“retaliatory raids”; “pre-emptive strikes” etc) methodologies (Sandler, Lapan, Walters; 1991, 13).They outline that due to the substitutability and complementarity of terrorist’s choice of activity, that governments cannot afford to increase the “relative cost or price of one kind of terrorist mode of attack” – they must increase the price of all complementary and substitutable modes of attack by raising the cost of blanket terrorists’ modes of attack relative to non-terrorist activities. Also they posit that a reduction in the already scarce resources, will further accentuate their constraints, thereby reducing choice and frequency of attacks.Insofar as “active” methodologies go, Sandler et al, argue that they are best avoided due to the imposition of “short-run costs with no apparent benefits”.
“Technology does work to harden targets” they say, leading to it being an important auspice against a “wide range of terrorist attacks” (Sandler, Lapan, Walters; 1991, 13) . The studies outlined above provide an insight into the decisions that terrorists make, given the constraints. They give us overview of terrorist behaviour akin to that of a rational economic actor.An economic actor refers to a rational entity who chooses how to expend resources, what to use now, and what to use later. The motivation and behavioural patterns are analysed from an economic standpoint – looking at the furtherance of one’s goals by making choices that yield a benefit. Psychopathological and situational factors are forgone in the economist’s picture (with the exception of the inferences made by Alan B. Krueger & Maleckova from polls/data/other empirical conclusions) of terrorist behaviour.
In “The Causes of Terrorism”, Martha Crenshaw explains terrorist behaviour in terms of “preconditions” and “precipitants”.The former she outlines are the set of factors (opportunities; “permissive factors”) that lead to terrorism over an extended period of time. The latter is the direct or immediate causes of terrorism.
A detailed account of the permissive and precipitative causes are accounted for in (Ross; 1993, 320-325). Ross adds that the cause of the “oppositional political” form of terrorism lies in structural, psychological and rational theories. The first two constructs are not touched upon by analyses focusing upon “choice theoretical” constructs.
In conclusion Alan B. Krueger & Maleckova’s work concludes with addressing the causes of terrorism, although these inferences are based on the analyses of empirical data, and not based on theoretical tools they outlined at the start of their paper. The literature by Quan Li ; Drew1 analyses rational choice theories and the effects (but no causes) of global institutions on terrorist activity. It doesn’t ascertain direct causes but rather outlines the effectiveness of various policies by using statistical data techniques.