Skip to main content

Advertisement

SpringerLink
Log in

A law and economics perspective on terrorism

  • Original Article
  • Published:
Public Choice Aims and scope Submit manuscript

Abstract

This paper reviews the existing law and economics literature on crime, noting where various models might apply to the terror context. Specifically, it focuses on two strands of the literature, deterrence and incapacitation. It considers anti-terror measures enacted by different countries, highlighting how the details of the laws correspond to the insights from economic models of crime. In conclusion, the paper proposes an efficient sorting mechanism in which individuals will be provided with incentives to reveal their type to law enforcement authorities.

This is a preview of subscription content, log in via an institution to check access.

Access this article

Log in via an institution

Price excludes VAT (USA)
Tax calculation will be finalised during checkout.

Instant access to the full article PDF.

Institutional subscriptions

Similar content being viewed by others

References

  • 18 USCA, § 2339.

  • 18 USCA, § 3583.

  • 18 USCA, § 981.

  • 31 USCA, § 5318.

  • 8 USCA, § 1226a.

  • Amit-Kohn, U., Renato, J., Glick, C.B., & Biton, J. (1993). Israel, the “Intifada” and the rule of law. Kiryat Ono: Israel Ministry of Defense Publications.

    Google Scholar 

  • Arend, A.C., & Beck, R. J. (1993). International Law and the use of force. Routledge: London.

    Google Scholar 

  • Arlen, J.H. (1994). The potentially perverse effects of eorporate criminal liability. Journal of Legal Studies, 23,833–867.

    Article  Google Scholar 

  • Arlen, J.H. (1994). The potentially perverse effects of corporate criminal liability. Journal of Legal Studies, 23,833–867.

    Article  Google Scholar 

  • Bebchuk, L., & Kaplow, L. (1993). Optimal sanctions and differences in individual’s likelihood of avoiding detection. International Review of Law and Economics,13,217–224.

    Article  Google Scholar 

  • Becker, G.S. (1968). Crime and punishment: an economic approach. Journal of Political Economy,76,169–217.

    Article  Google Scholar 

  • Ben-Shahar, O., & Harel, A. (1995). Blaming the victim: optimal incentives for private precautions against crime. Journal of Law, Economics and Organization, 11,434–455.

    Google Scholar 

  • Bernholz, P. (2004). Supreme values as the basis for terror. European Journal of Political Economy, 20,317–333.

    Article  Google Scholar 

  • Block, M. (1991). Optimal penalties, criminal law and the control of corporate behavior. Boston University Law Review, 71,395–419.

    Google Scholar 

  • Bowles, R., & Garoupa, N. (1997). Casual police corruption and the economics of crime. International Review of Law and Economics, 17,75–87.

    Article  Google Scholar 

  • Buchanan, J.M. (1973). A defense of organized crime? In: S. Rottenberg (Ed.), The economics of crime and punishment. Washington, DC: American Enterprise Institute for Public Policy Research.

  • Chang, J.J., Lai, C.C., & Yang, C.C. (2000). Casual police corruption and the economics of crime: Further results. International Review of Law and Economics, 20,35–51.

    Article  CAS  Google Scholar 

  • Cohen, M.A. (2000). The economics of crime and punishment: implications for sentencing of economic crimes and new technology of offenses. George Mason Law Review, 9,503–528.

    Google Scholar 

  • Deuteronomy 5:9

  • Dick, A.R. (1995). When does organized crime pay? a transaction cost analysis. International Review of Law and Economics, 15,25–45.

    Article  Google Scholar 

  • Exodus 20:5

  • Fiorentini, G., & Peltzman, S. (1995). Introduction. In: G Fiorentini, & S. Peltzman (Eds.), The economics of organised crime. Cambridge: Cambridge University Press.

    Google Scholar 

  • Frey, B.S., & Luenchinger, S. (2004). Decentralization as a disincentive for terror. European Journal of Political Economy, 20,509–515.

    Article  Google Scholar 

  • Friedman, D.D. (1981). Reflections on optimal punishment or should the rich pay higher fines? Research in Law and Economics, 3,185–205.

    Google Scholar 

  • Gambetta, D., & Reuter, P. (1995). Conspiracy among the many: the Mafia in legitimate industries, In: G Fiorentini, & S. Peltzman (Eds.), The economics of organized crime. Cambridge: Cambridge University Press and CEPR.

  • Gan, L., Williams, R.C., & Wiseman, T. (2004). A simple model of optimal hate crime legislation. NBER Working-Paper 10463.

  • Garfinkel, M.R. (2004). Global threats and the domestic struggle for power. European Journal of Political Economy, 20,495–508.

    Article  Google Scholar 

  • Garoupa, N., & Gravelle, H. (2003). Efficient deterrence does not require that the wealthy should be able to buy justice. Journal of Institutional and Theoretical Economics, 159,545–552.

    Article  Google Scholar 

  • Garoupa, N., & Klerman, D. (2004). Corruption and the optimal use of nonmonetary sanctions. International Review of Law and Economics, 24,219–225.

    Article  Google Scholar 

  • Garoupa, N. (1997a). Optimal law enforcement and the Drug market: Some comments on the Schengen agreements. International Review of Law and Economics, 17,521–535.

    Article  Google Scholar 

  • Garoupa, N. (1997b). The theory of optimal law enforcement. Journal of Economic Surveys, 11,267–295.

    Article  Google Scholar 

  • Garoupa, N. (2000a). Corporate criminal law and organization incentives: a managerial perspective. Managerial and Decision Economics, 243-252.

  • Garoupa, N. (2000b). The economics of organized crime and optimal law enforcement. Economic Inquiry, 38,278–288.

    Article  Google Scholar 

  • Garoupa, N. (2001a). Optimal law enforcement when victims are rational players. Economics of Governance, 2,231–242.

    Article  Google Scholar 

  • Garoupa, N. (2001b). Optimal probability and magnitude of fines. European Economic Review, 45,1765–1771.

    Article  Google Scholar 

  • Garoupa, N. (2005). Optimal law enforcement and criminal organization. Journal of Economic Behavior and Organization. Forthcoming.

  • Gravelle, H., & Garoupa, N. (2002). Optimal deterrence with legal defence expenditure. Economic Inquiry, 40,366–379.

    Article  Google Scholar 

  • Grossman, H.I. (1995). Rival Kleptocrats: The Mafia versus the state. In: G Fiorentini, & S. Peltzman (Eds.), The economics of organized crime. Cambridge: Cambridge University Press and CEPR.

  • Harel, A. (1994). Efficiency and fairness in criminal law: the case for a criminal law principle of comparative fault. California Law Review, 82,1181–1229.

    ADS  Google Scholar 

  • Hui-Wen, K., & Png, I.P.L. (1994). Private security: deterrent or diversion? International Review of Law and Economics, 14,87–101.

    Article  Google Scholar 

  • Hylton, K.N. (1996). Optimal law enforcement and victim precaution. Rand Journal of Economics, 27,197-206.

    Article  Google Scholar 

  • Iannaccone, L. (2004). The Market for Martyrs. Unpublished manuscript available at http://www.mercatus.org/pdf/materials/822.pdf.

  • Klick, J., & Tabarrok, A. (2005). Using terror alert levels to estimate the effect of police on crime. Journal of Law & Economics, 48(1), 267–280.

    Article  Google Scholar 

  • Klick, J. (forthcoming). Salvation as a selective incentive. International Review of Law and Economics.

  • Konrad, K.A. (2004). The investment problem in terrorism. Economica, 71,449–459.

    Article  Google Scholar 

  • Konrad, K.A., & Skaperdas, S. (1997). Credible threats in extortion. Journal of Economic Behavior and Organization, 33,23–39.

    Article  Google Scholar 

  • Lapan, H.E., & Sandler, T. (1988). To bargain or not to bargain: That is the question. American Economic Review, 78,16–20.

    Google Scholar 

  • Lapan, H.E., & Sandler, T. (1993). Terrorism and signalling. European Journal of Political Economy, 9,383–397.

    Article  Google Scholar 

  • Lott, J.R. (1987). Should the wealthy be able to buy justice? Journal of Political Economy, 95,1307–1316.

    Article  Google Scholar 

  • Malik, A.S. (1990). Avoidance, Screening and optimum enforcement. Rand Journal of Economics, 21,341–363.

    Article  Google Scholar 

  • Mattiacci, G.D., & Parisi, F. (2003). The cost of delegated control: vicarious liability, secondary liability and mandatory insurance. International Review of Law and Economics, 23,453–475.

    Article  Google Scholar 

  • Miceli, T.J., & Segerson, K. (2004). Punishing the Innocent along with the Guilty: The economics of individual versus group punishment (Working-paper 2004-37). Storrs: University of Connecticut.

  • Murphy, J. (1989). State support of international terrorism. Boulder: Westview Press.

    Google Scholar 

  • Olson, M. (1971). The logic of collective action. Cambridge: Harvard University Press.

    Google Scholar 

  • Parisi, F. (2001). The genesis of liability in ancient law. American Law and Economics Review, 3,82–124.

    Google Scholar 

  • Parisi, F., & Mattiacci, G.D. (2004). The rise and fall of communal liability in ancient law. International Review of Law and Economics, 24,489–506.

    Article  Google Scholar 

  • Polinsky, A.M., & Shavell, S. (1992). Enforcement costs and the optimal magnitude and probability of fines. Journal of Law and Economics, 35,133–148.

    Article  Google Scholar 

  • Polinsky, A.M., & Shavell, S. (1993). Should employee be subject to fines and imprisonment given the existence of corporate liability. International Review of Law and Economics, 13,239–257.

    Article  Google Scholar 

  • Polinsky, A.M., & Shavell, S. (2000). The economic theory of public enforcement law. Journal of Economic Literature, 38,45–76.

    Google Scholar 

  • Polinsky, A.M., & Shavell, S. (1979). The optimal trade-off between the probability and magnitude of fines. American Economic Review, 69,880–891.

    Google Scholar 

  • Polinsky, A.M., & Shavell, S. (2001). Corruption and optimal law enforcement. Journal of Public Economics, 81,1–24.

    Article  Google Scholar 

  • Posner, R.A. (1980). A theory of primitive society, with special reference to law. Journal of Law and Economics, 23(1).

  • Reinganum, J.F. (1993). The law enforcement process and criminal choice. International Review of Law and Economics, 13,115–134.

    Article  Google Scholar 

  • Reuter, P. (1983). Disorganized crime. Cambridge: MIT.

    Google Scholar 

  • Sandler, T., & Enders, W. (2004). An economic perspective on transnational terrorism. European Journal of Political Economy, 20,301–316.

    Article  Google Scholar 

  • Sandler, T. (2005). Collective versus unilateral responses to terrorism. Public Choice, 124,75–93.

    Article  Google Scholar 

  • Segerson, K., & Tietenberg, T. (1992). The structure of penalties in environmental enforcement: An economic analysis. Journal of Environmental Economics and Management, 23,179–200.

    Article  Google Scholar 

  • Shavell, S. (1990). Deterrence and the punishment of attempts. Journal of Legal Studies, 19,435–466.

    Article  Google Scholar 

  • Shavell, S. (1991). Individual precautions to prevent theft: Private versus socially optimal behavior. International Review of Law and Economics, 11,123–132.

    Article  Google Scholar 

  • Shavell, S. (1997). The optimal level of corporate liability given the limited ability of corporations to penalize their employees. International Review of Law and Economics, 17,203–213.

    Article  Google Scholar 

  • Skaperdas, S. (2001). The political economy of organized crime: Providing protection when the state does not. Economics of Governance, 2,173–202.

    Article  Google Scholar 

  • Stigler, G.J. (1970). The optimum enforcement of laws. Journal of Political Economy, 78,526–536.

    Article  Google Scholar 

  • Teichman, D. (2005). The market for criminal justice: Federalism, crime control and jurisdictional competition. Michigan Law Review, 103,1831–1876.

    Google Scholar 

  • Wilde, L.L. (1992). Criminal choice, nonmonetary sanctions and marginal deterrence: A normative analysis. International Review of Law and Economics, 12,333–344.

    Article  Google Scholar 

Download references

Author information

Authors and Affiliations

  1. Department of Economics, Universidade Nova de Lisboa, Campus de Campolide, 1099-032, Lisboa, Portugal

    Nuno Garoupa

  2. College of Law, Florida State University, Tallahassee, FL, 32306-1601, USA

    Jonathan Klick

  3. University of Minnesota School of Law, 229 19th Avenue, South Minneapolis, MN, 55455-0401, USA

    Francesco Parisi

Authors
  1. Nuno Garoupa
    View author publications

    You can also search for this author in PubMed Google Scholar

  2. Jonathan Klick
    View author publications

    You can also search for this author in PubMed Google Scholar

  3. Francesco Parisi
    View author publications

    You can also search for this author in PubMed Google Scholar

Corresponding author

Correspondence to Nuno Garoupa.

Rights and permissions

Reprints and permissions

About this article

Cite this article

Garoupa, N., Klick, J. & Parisi, F. A law and economics perspective on terrorism. Public Choice 128, 147–168 (2006). https://doi.org/10.1007/s11127-006-9058-4

Download citation

  • Received:

  • Accepted:

  • Published:

  • Issue Date:

  • DOI: https://doi.org/10.1007/s11127-006-9058-4

Keywords

Search

Navigation