The Elgar Companion to Public Choice, Second Edition
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The Elgar Companion to Public Choice, Second Edition

Edited by William F. Shughart II, Laura Razzolini and Michael Reksulak

The Companion lays out a comprehensive history of the field and, in five additional parts, it explores public choice contributions to the study of the origins of the state, the organization of political activity, the analysis of decision-making in non-market institutions, the examination of tribal governance and to modeling and predicting the behavior of international organizations and transnational terrorism.
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Chapter 29: Collective action and (counter)terrorism

G. Daniel and M. Arce


Terrorism is a form of asymmetric conflict where violence is used against civilians and passive military personnel in order to influence a target audience beyond that of the immediate victims for political, religious or ideological purposes. Given that terrorism and responses to terrorism are political acts calculated to have maximum effect, both phenomena fall under the rubric of public choice. For example, transnational counterterror activity involves the voluntary actions of one or more countries and as such counterterrorism can exhibit classic Olsonian collective action problems (Olson 1965), depending on the direction of the externality produced by each target nation’s action. It is also the case that modern terrorist organizations themselves are highly decentralized, employing cell structures or attempting to inspire affiliates or start-ups to act in support of their cause. Hence, terror organizations themselves face collective action problems and also classic agency problems in the sense of Mitnick (1975). In particular, when terrorist organizers face an adverse selection problem (for example, in recruiting conventional versus suicide operatives), the screening process reveals why poverty may not ultimately be a driver of terrorism. Finally, given all the attention and effort paid to (counter)terror activities, the general lack of political resolution – on the part of terrorists and the governments they target – begs the question as to how these behaviors constitute the actions of rational individuals.

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