Effect of Terrorism

Introduction

Paris, the 7th of January of 2015, 11AM, a terrorist attack by two Muslim brothers that killed 12 people in the office of the satirical newspaper Charlie Hebdo. The slogan “Je suis Charlie” comes out. Who hasn‟t heard about it? Paris again, the evening of the 13th of November 2015, a series of coordinated terrorist attacks murdered more than 130 humans. What city in the world didn‟t show its allegiance with the French citizens, by projecting the colors of the French flag on its major buildings after this catastrophic event? Brussels, the morning of the 22nd March of 2016, violent bombings in the metro and the airport resulted in injuries and a massacre of more than 300 bodies… Last but not least, the 11th September of 2011, two of the highest towers in New-York collapsed due to a terrorist attack which lead to more than 3000 deaths. Who doesn‟t remember this date? And with many more dates to remember, countless hours mourning their loss, and many other countries who were and are still today the target of terrorists…

Terrorism continues to be and has always been a significant concern for the government and the population. As a Swiss citizen, all the recent aforesaid terrorist episodes have impacted me almost directly. At each of these major fatalities, I had to wait to know if my friends in Paris or the members of my family in Brussels were injured, or worse, erased, by these traumatic incidents. It is why, I feel related to this topic as a citizen of this world as well as an economic student. It is only now I can begin to understand how deeply I can relate to this events and examine them from an economic view point.

After some researches on the topic, I have discovered a study done by Abel Brodeur (2015) on the effect of Terrorism on Employement “Terrorism and Employment: Evidence from Successful and Failed Terror Attacks”. I found it really intriguing because it examines the economic consequences that a terrorist infraction can have on the country targeted. Furthermore, it examines the channels through which terrorism effects local economies. The author first studies the link between the different targets (businesses, government buildings, etc.) and the kind of attack (e.g. bombs, hijackings etc.), with the resulting destroyed capital stock and diminution in the job market. In addition, he has also looks at the impact those actions could have on economics attitude as political beliefs, government expectations, religion and women‟s place in the society. I find this analysis fascinating as Brodeur has taken into consideration a lot of different variables which can be related and affected by terrorist attacks.

However, this study has a sizeable issue: the lack of expenditure effects. Indeed the most tremendous problem of this paper is the fact that Abel Brodeur fails to include „the toughness‟, in other words, the counterterrorism expenditures that