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Dealing with Terrorism – Stick or Carrot?

Bruno S. Frey, Distinguished Professor of Behavioural Science, University of Warwick, UK, Guest Professor, Zeppelin University, Friedrichshafen, Germany and Research Director, CREMA – Centre for Research in Economics, Management and the Arts, Switzerland
Emphasising a positive approach to dealing with terrorism (the carrot), this book provides a critique of deterrence policy (the stick) which can be ineffective and even counterproductive, and proposes three alternative and effective anti-terrorist policies: Decentralisation reduces vulnerability to terrorist attacks. A system with many different centres is more stable due to its diversity, enabling one part to substitute for another; Positive incentives can be offered to actual and prospective terrorists not to engage in violent acts. Incentives include: reintegrating terrorists into society, welcoming repentents and offering them valued opportunities; and Diverting attention by naming several terrorist groups potentially responsible for a particular terrorist act. The government thus supplies more information than the terrorist responsible would wish.
Extent: 200 pp
Hardback Price: $127.00 Web: $114.30
Publication Date: 2004
ISBN: 978 1 84376 828 9
Availability: In Stock
Paperback Price: $46.00 Web: $36.80
Publication Date: 2005
ISBN: 978 1 84542 258 5
Availability: In Stock
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  • Economics and Finance
  • Economic Psychology
  • Politics and Public Policy
  • International Relations
  • Terrorism and Security
Emphasising a positive approach to dealing with terrorism (the carrot), this book provides a critique of deterrence policy (the stick) which can be ineffective and even counterproductive, and proposes three alternative and effective anti-terrorist policies:

• Decentralisation reduces vulnerability to terrorist attacks. A system with many different centres is more stable due to its diversity, enabling one part to substitute for another.
• Positive incentives can be offered to actual and prospective terrorists not to engage in violent acts. Incentives include: reintegrating terrorists into society, welcoming repentents and offering them valued opportunities.
• Diverting attention by naming several terrorist groups potentially responsible for a particular terrorist act. The government thus supplies more information than the terrorist responsible would wish.

The proposed anti-terrorist policy has two important advantages over a coercive policy. The whole interaction between terrorists and the government transforms into a positive sum game and the strategy undermines the cohesiveness of the terrorist organisation.

Surveying empirical results on the effects of terrorism on the economy and society, Bruno Frey demonstrates the strength of an economic approach to terrorism, which will be of great interest to social and also political scientists, public policy scholars, international relations experts and researchers, and above all, economists. The alternatives to deterrence illustrated in the book are advantageous for the general public and politicians, and the actuality that a positive policy is better than a coercive policy will be of great appeal to educators.
‘Bruno Frey has produced a thoughtful and provocative discourse on the application of economic thinking to policies dealing with terrorism.’
– Anthony M. Yezer, Journal of Homeland Security and Emergency Management

‘The merits of this work lie in the author’s innovative use of the economic paradigm to study terrorism and his proposal for an alternative policy to prevent terrorist attacks. This work contains an excellent review of the literature. Recommended.’
– J.R. Hedtke, Choice

‘Frey provides a useful compilation of the arguments and evidence, pro and con, for various strategies for dealing with terrorism.’
– Richard N. Cooper, Foreign Affairs

‘Bruno Frey has done it again! He has taken the number one topic on everyone’s lips – terrorism – and undertaken a careful and highly relevant analysis of potential causes and ways of extracting ourselves from the curse of terrorism. He presents several options. Scholars who have been distressed with the overcentralized regimes imposed or recommended to many developing countries will be pleased to read his discussion of polycentricism as among the policies that may enhance capabilities to solve underlying grievances associated with terrorism. Social scientists and policymakers will both find this book of considerable value.’
– Elinor Ostrom, Indiana University, Bloomington, US

‘A powerful plea for tackling terrorism not only by force but by incentives to abandon terrorism.’
– Lord Layard, London School of Economics, UK
Contents: Introduction Part I: Terrorism and Anti-Terrorist Policies 1. Terrorism: The Curse of our Times? 2. Using Deterrence Against Terrorism Part II: An Economic Approach to Terrorism 3. Terrorism Analysed 4. Putting Policies into Perspective Part III: Three Positive Policies for Dealing with Terrorism 5. Polycentricity Reduces Vulnerability 6. Providing Positive Incentives Not to Engage in Terrorism 7. Diffusing Media Attention Part IV: What Can Be Done? 8. Comparing Anti-Terrorist Policies 9. Conclusions References Index