Terrorism

Network Externalities and the Structure of Terror Networks

Walter Enders & Paan Jindapon

Abstract:

We analyze the optimal network structure of two types of terrorist organizations. In the centralized network, the leadership selects the level of individual effort and the level of group connectivity so as to maximize the expected net welfare of the organizations membership. Leaders in loosely-connected networks will also seek to balance the trade-off between security and communications. However, with decentralized decision making, the individual nodes may not make optimal decisions from the group’s perspective. As a consequence, the decentralized decision making process is suboptimal from the overall perspective of the network. In particular, the leadership in a centralized network is able to coordinate the activities of all network members and to take advantage of important network externalities.

New Trends in Terrorist Network Structure

Walter Enders and Xuejuan Su

Abstract:

After the events of 9-11, US counterterrorism became more proactive
in that the Patriot Act allowed the authorities far more freedom to directly
attack terrorist network structures. We argue that rational terrorists will
anticipate such policies and restructure themselves to be less penetrable.
We model the trade-off between security and intra-group communication
faced by terrorists. The model is used to derive the anticipated changes
in network structure and the consequent changes in the type, complexity
and success rate of potential terrorist attacks.

Measuring the Economic Cost of Terrorism

Walter Enders & Eric Olson

Transnational Terrorism

Walter Enders, Daniel G. Arce, and Todd Sandler

Distribution Of Transnational Terrorism Among Countries By Income Classes And Geography After 9/11

Walter Enders

Abstract:

This article applies an autoregressive intervention model for the 1968-2003 period to identify either income-based or geographical transference of transnational terrorist events in reaction to the rise of fundamentalist terrorism, the end to the Cold War, and 9/11. Our time-series study investigates the changing pattern of transnational terrorism for all incidents and those involving U.S. people and property. Contrary to expectation, there is no evidence of an income-based post-9/11 transfer of attacks to low-income countries except for attacks with U.S. casualties, but there is a significant transference to the Middle East and Asia where U.S. interests are, at times, attacked. We also find that the rise of fundamentalist terrorism has most impacted those regions the Middle East and Asia  with the largest Islamic population. The end to the Cold War brought a terrorism peace dividend that varies by income and geography among countries. Based on the empirical findings, we draw policy recommendations regarding defensive counterterrorism measures.

Forecasting Series Containing Offsetting Breaks: Old School and New School Methods of Forecasting Transnational Terrorism

Walter Enders, Yu Liu, and Ruxandra Prodan

Abstract:

Economic time-series often contain an unknown number of structural breaks of unknown form.
The so-called ’Old School’ (OS) forecasting methods simply difference the data or use various
types of smoothing functions. The ’New School’ (NS) view argues that properly estimated break
dates can be used to control for regime shifts when forecasting. Regime-switching models allow
for breaks as part of the data generating process. In order to compare the various forecasting
methods, we perform a Monte Carlo study with data containing different degrees of persistence
and different types of breaks. The in-sample and out-of-sample properties of each forecasting
method are compared. The results are used to suggest a method to forecast various types of
transnational terrorist incidents. The transnational terrorism data is interesting because the rise of
religious fundamentalism, the demise of the Soviet Union, and the rise of al Qaeda have been
associated with changes in the nature of transnational terrorism. It is of interest to compare the
forecasts using the ’known’ break dates to the forecasts of the various OS, NS and regimeswitching
methods.

Terrorism: An Empirical Analysis

Walter Enders

9/11: What Did We Know and When Did We Know It?

Walter Enders, Beom S. Lee, and Todd Sandler

Abstract:

In February 1998, Osama Bin Laden published a signed statement calling for a fatwa against the
United States for its having “declared war against God.” As we now know, the fatwa resulted in
the unprecedented attack of 9/11. The issue of whether or not 9/11 was in any way predictable
culminated in the public debate between Richard Clarke, former CIA Director George Tenet and
the White House. We examine whether there was any evidence of a structural change in the
terrorism data at or after February 1998 but prior to June 2001, controlling for the possibility of
other breaks in earlier periods. In doing so, we use the standard Bai-Perron procedure and our
sequential importance sampling (SIS) Markov chain Monte Carlo (MCMC) method for
identifying an unknown number of breaks at unknown dates. We conclude that sophisticated
statistical time-series analysis would not have predicted 9/11.

Economic Consequences Of Terrorism In Developed And Developing Countries: An Overview

Walter Enders and Todd Sandler

Is Transnational Terrorism Becoming More Threatening?

Walter Enders & Todd Sandler

Abstract:

This study applies time-series techniques to investigate the current threat posed by transnational terrorist incidents. Although the number of incidents has dropped dramatically during the post cold war period, transnational terrorism still presents a significant threat. In recent years, each incident is almost 17 percent-age points more likely to result in death or injuries. Three alternative casualties series (incidents with injuries and/or deaths, the proportion of incidents with casualties, and incidents with deaths) are investigated. These series increased in November 1979 with the takeover of the U.S. embassy in Tehran and again after the fourth quarter of 1991. The growth of religious terrorism appears to account for the increased severity of terrorist attacks since the last quarter of 1991. All three casualties series displayed more deterministic factors than the noncasualties series, which is largely random after detrending. Cycles in the aggregate incident series are solely attributable to the underlying casualties series.

Transnational Terrorism 1968-2000: Thresholds, Persistence, And Forecasts

Walter Enders & Todd Sandler

Abstract:

This paper applies a threshold autoregression (TAR) model to a casualties time series to show that the autoregressive nature of such events depends on the level of terrorism at the time of a shock. Following a shock, persistence of heightened attacks characterizes low-terrorism regimes, but not high-terrorism regimes. Similar findings are associated with incidents with deaths, bombings with deaths, and hostage taking. In contrast, the assassinations series indicates some persistence even in the high-terrorism state, while the threats/hoaxes series displays persistence in only the high-terrorism state. For all series studied, the TAR model outperforms a standard autoregressive representation. A forecasting method is engineered based on the TAR estimates, and nicely tracks resource-using events.

An economic perspective on Transnational terrorism

Walter Enders & Todd Sandler 

Abstract:

This paper indicates how economic analysis can be applied for enlightened policy making with respect to transnational terrorism. Both theoretical tools (e.g., game theory and utility-maximizing models) and empirical techniques (e.g., time series and spectral analysis) are used to put modern-day terrorism into perspective and to suggest policy responses. From hostage negotiations to the installation of technological barriers (e.g., metal detectors, embassy fortification), economic methods are shown to provide policy insights. Transnational terrorism and efforts to address it are shown to involve transnational externalities and market failures. Strategic interactions abound in the study of transnational terrorism.

What Do We Know About The Substitution Effect In Transnational Terrorism?

Walter Enders & Todd Sandler

The Impact of Transnational Terrorism on U.S. Foreign Direct Investment

Walter Enders, Adolfo Sachsida, and Todd Sandler

Rational Terrorists and Optimal Network Structure

Walter Enders and Xuejuan Su

Abstract:

After the events of 9-11, US counterterrorism became more proactive in that the Patriot Act allowed the authorities far more freedom to directly attack terrorist network structures. We argue that rational terrorists will attempt to thwart such policies and restructure themselves to be less penetrable. We model the trade-off between security and intra-group communication faced by terrorists. The model is used to derive the anticipated changes in network structure and the consequent changes in the type, complexity and success rate of potential terrorist attacks.

Walter Enders & Todd Sandler

Abstract:

Using time-series procedures, we investigate whether transnational terrorism changed following 9/11 and the subsequent US-led war on terrorism. Perhaps surprising, little has changed to the time series of overall incidents and most of its component series. When 9/11 is prejudged as a break date, we find that logistically complex hostage-taking events have fallen as a proportion of all events, while logistically simple, but deadly, bombings have increased as a proportion of deadly incidents. These results hold when we apply the Bai-Perron procedure where structural breaks are data identified. This procedure locates earlier breaks in the mid-1970s and 1990s. Reasonable out-of-sample forecasts are possible if structural breaks are incorporated fairly rapidly into the model.