Recent acts of terrorism and statements by terrorist organizations have focused attention on the economic damages that can be produced by terrorist activities and the desire of some terrorists to inflict economic harm in pursuit of their goals. Based on a review of the relevant literature, this report describes the range of economic effects of terrorist activities. It examines in detail the September 11, 2001, attacks and the extended terrorist campaign waged by the Provisional Irish Republican Army as examples of two extremes of terrorist economic targeting: high-impact, episodic terrorism and lower-level, but extended, campaign terrorism. From these examples, the authors develop a framework capturing the full range of costs that may result from economic targeting and use it to explore the range of defensive measures that might be used to respond to this threat.
The research described in this report was conducted within the RAND Center for Terrorism Risk Management Policy (CTRMP).
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