TITLE:
Impact of Domestic Terrorism on Economy: A Literature Review
AUTHORS:
Robb Shawe, Ian R. McAndrew
KEYWORDS:
Domestic Terrorism, Terrorism Attacks, Economics, GDP Losses, The Dominant Theory
JOURNAL NAME:
iBusiness,
Vol.15 No.1,
March
29,
2023
ABSTRACT: Terrorism has had a substantial economic effect all over the world.
Statistical analysis from the literature
review demonstrates the costs of the global economy at approximately 33 billion dollars in 2018 and 855 billion dollars
since 2000 (Iqbal et al., 2019). After
the domestic terror attacks on 11 September 2001, terrorism increased dramatically, with the sharpest upsurge between 2011 and 2014 following the post-Arab uprising violence in Syria, Libya, Yemen,
and Egypt. With the rise of the Islamic State terrorist group in the Middle East, conflicts in Iraq, Afghanistan, and
Pakistan became more intense. The
imposition of economic sanctions has been related to an increase in domestic terrorism, postulating that when
sanctions impair the financial functioning of the target country, feelings of bitterness and despair are
intensified among the poor, who may lash out by turning to domestic terrorism.
Terror events would appear more likely where
states fail to provide, or reduce, an economic
safety net to mitigate the transformative effects of economic development. Financial performance generally leads to
terrorist violence. Economic
sanctions lead to a rise in the rate of domestic terrorism. Terrorism is rarely found
to influence growth in bivariate and trivariate specifications causally. Countries featuring minority groups’ economic
discrimination are significantly more likely to experience domestic
terrorist attacks. In contrast, countries lacking minority groups or whose
minorities do not face discrimination are
considerably less likely to experience terrorism. Highly democratic and long-enduring states are less prone to domestic
terrorism than less democratic states.