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In the future, the economist plans to concen- trate his research efforts primarily on determining which economic policies are necessary to fight terrorism. His reflections on the costs of terrorist attacks have also made him conscious of the terrorists’ cost–benefit analysis. Krieger sees the Paris attacks as “poor people’s terrorism,” because it is possible even for people of modest means: The combination of weapons and explo- sives available at a low cost and highly violent people provides “a simple means of spreading fear and terror.” However, less wealthy terrorist groups need to calculate carefully, because a large-scale attack designed to attract as much attention from the media as possible rapidly de- pletes their financial resources. The terrorists thus select their targets with great care. The objective is to hit the country hard and frighten the population, as in the case of the raids and attacks by the Islamist terrorist group Boko Har- am in Nigeria or attacks by terrorists living in Western industrial nations who identify with the IS. Al-Qaeda is an exception to this rule, as the group was relatively well funded. But even their attacks show how terrorists can succeed in causing great damage with little means: The attacks on the US Embassy in Nairobi, Kenya, in 1998, which claimed 224 lives and injured thou- sands more, for example, cost Al-Qaeda a mere 10,000 US dollars. The attack on the aircraft carrier USS Cole in Yemen in 2000, which killed 17 American soldiers, cost only 5000 US dollars. www.think-ordo.de 0 10 20 30 40 50US dollars (in billions) Loss of four civil airplanes: Damage to buildings and infrastructure: Cleanup work: Direct loss of jobs (ca. 83,000): Loss of insurance policies: Loss in sales in aviation: Government emergency funds (e.g., increased airport security, sky marshals, military operation in Afghanistan): The Terrorist Attacks of 11 September 2001: Selected Financial Factors 385 billion dollars 10 – 13 billion dollars 17 billion dollars 10 billion dollars 1.3 billion dollars 40 billion dollars 40 billion dollars The attacks cost the United States more than 100 billion US dollars. The sum includes the value of lost human lives as well as that of damages to real estate and losses in production. If one also takes into account the fact that profits were lower on the stock market due to economic fluctuations and that the interest rate was raised, the costs soar to two trillion US dollars. Source: Institute for the Analysis of Global Security; Graph: Kathrin Jachmann 7 Further Reading Krieger, T. / Meierrieks, D. (2015): The rise of capitalism and the roots of anti-American terrorism. In: Journal of Peace Research 52/1, pp. 46–61. Brockhoff, S. / Krieger, T. / Meierrieks, D. (2015): Great expectations and hard times: The (nontrivial) impact of education on domestic terrorism. In: Journal of Conflict Resolution 59/7, pp. 1186–1215. Krieger, T. / Meierrieks, D. (2013): Die ökonomische Theorie des Terrorismus. In: WiSt – Wirtschaftswissenschaftliches Studium 42/12, pp. 691–696. Prof. Dr. Tim Krieger studied economics at the Universities of Kiel and Wisconsin–Eu Claire (USA). He earned his PhD at the University of Munich in 2004 with a dissertation on the political economy of migra- tion in aging societies. In 2007 he accepted a position at the University of Pader- born as a junior professor of international economic policy. Following stints at the Universities of Mainz and Marburg, Krieger took over the new Wilfried Guth Endowed Professorship in Regulation and Competition Policy at the University of Freiburg in July 2012. His research builds on the ordo- liberalism of the “Freiburg School” founded by Walter Eucken, which laid the foun- dation for Germany’s social market economy. Photo: Hanspeter Trefzer 010203040 50US dollars (in billions)

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