Extras: Anne Bradley on the Political Economy of Terrorism

national security public choice war on terror terrorism economic way of thinking

March 4, 2025

What happens if we acknowledge that terrorists are rational actors and that they, like the rest of us, are also responding predictably to incentives? Kevin Lavery listens in to a Great Antidote episode that takes that insight seriously. Find out more about the Political Economy of Terrorism with Anne Bradley and Juliette Sellgren.

The war on terror has been an unabashed failure. Two decades of wars fought and trillions of dollars spent have failed to reduce terrorism worldwide. Additionally, the war on terror has contributed to the erosion of the personal freedoms of American citizens and the violation of the human rights of foreign nationals, such as at Guantanamo Bay. The withdrawal from Afghanistan in August 2021, marked a turning point to public opinion of the war on terror, as Americans saw how the military efforts to eradicate terrorism had not fulfilled their promise. Anne Bradley and Juliette Sellgren apply economic thinking and public choice theory to explain why the war on terror has failed, why terrorism occurs in the first place, and how humanizing terrorists can reduce terrorism.

Anne Bradley is an economics professor at the Institute of World Politics. She is also the George and Sally Mayer Fellow for Economic Education, and the Vice President of Academic Affairs at The Fund for American Studies

You can listen to the episode here: Anne Bradley on the Political Economy of Terrorism

Throughout the episode Bradley puts the war on terror in perspective. She estimates that if the war on terror were a country, it would have the third largest GDP in the world. But at the cost of hundreds of thousands of lives, trillions of dollars, and tens of millions of refugees, limited progress has been made. Bradley explains part of the problem is not using the economic way of thinking in conversations about terrorism. In particular, terrorists are not treated like rational actors who make decisions based on their specific trade-offs and constraints, they are erroneously treated as non-persons.

“How are you supposed to deal with humans without facing their humanity?” asks Sellgren. Bradley’s solution is to humanize terrorists, in an economic sense. Not to provide sympathy, but to provide understanding. Terrorists are rational and they face incentives and trade-offs. To Bradley, discussions about terrorism offer an opportunity to teach economics, to understand people more deeply and productively. Bradley argues that the idea of terrorists as irrational people who do not respond to incentives implies that the amount of terrorism in the world cannot be addressed and leads to the very policy failures of the war on terror.

…terrorists are people, and that's very obvious. But when you listen to the rhetoric, it's not. When you listen to the way people talk about terrorism, they act as if it's kind of almost a unique grouping of species of people in some ways that are kind of uniquely deranged and don't possess human reason or human agency…This is wrong. To talk about terrorists this way, it's going to lead us down policy roads that are probably going to not only not work, but cause harm. So, there's going to be kind of this whole host of consequences, which certainly has been the case.

Bradley analyzes these consequences through Public Choice theory. The reality is that politicians are self-interested and want to stay in office. Bradley finds that policies meant to address terrorism are often understandably motivated by fear. After a terrorist attack, politicians want to show strength and give retribution but this can and does produce poorly planned, knee-jerk policies. . Additionally, the war on terror has been given carte blanche because no politician wants to appear soft on violence and therefore spending shoots to the moon without meaningful examination or pushback.

…look at the Patriot Act, this comes up almost at the snap of two fingers, which means it's not well thought out. It's not debated. It's not deliberated…What about the unintended consequences?

Bradley likens counterterrorism to Whac-A-Mole, the concentrated effort to destroy one terrorist cell has a limitied effect, because there are other groups popping up, and it is difficult to destroy them all at once. This leaves counter-terrorist efforts in a perpetual chase. To Bradley, this reactive approach comes from an over-emphasis on “the supply” of terrorism. Bradley believes the demand for terrorism should be examined more, with a focus on the institutional context in which terrorism is the most common.

Are we trying to simply stunt the supply of terrorism or are we trying to curb the demand? And my argument has been that I think we overly focus on the supply of terrorism…Steve Horwitz used to always say, supply is demand in disguise. And I love this phrase, and I use it with my students all the time. Supply is demand in disguise.That's an economic insight. So, if we are just focusing on the supply curve and we're not dealing with the demand curve, we're never going to stop terrorism. We're just going to move it around.

A natural question arises, under what circumstances will someone who may or may not commit an act of terror, choose to act instead of refrain? One reason is a lack of freedom.

I just looked at some of the countries where terrorism is most prolific, like Iraq, Afghanistan, Nigeria, Syria, Yemen, and just looked at their economic freedom scores. And it's really not a surprise that those are countries that don't have a lot of economic freedom. They don't have a lot of robust commerce and growing markets. They don't have civil liberties, they don't have political freedoms. And so I think all of those things work together or work against each other. And so to me, this is the heart of the matter.…Reducing the demand curve is about institutional change.

Bradley’s primary solution lies within institutional change. She acknowledges the benefit of measures to raise the cost of terrorism, such as the TSA, but understands that these solutions have a limited effect, and require attention to be placed on the root causes of terrorism. Terrorists engage in cost-benefit analysis, therefore there is a possible world where terrorism is too costly to commit. Sellgren’s question, “Have we ever asked what terrorists want?” is necessary but is uncomfortable for many. This question can best be answered by examining the institutional contexts that reduce the demand for terrorism for individuals.

Unsurprisingly, Bradley receives pushback to her plea to analyze terrorists like other people. From these experiences, she offers advice to other critics of the war on terror. She finds that leading with empathy is necessary, while understanding the economic rationale behind the position. Sellgren observes it comes across as insulting, and apathetic to people’s safety otherwise. Bradley agrees, and finds commonality with how economists should discuss the minimum wage, the ability to sympathize is a key objective.

If I'm talking to somebody that is on the progressive left and I lead with: the minimum wage is stupid, it hurts people that it claims to help, and we should eliminate it, I've shut a door with that person. It sounds arrogant, right? It sounds like, “I'm an economist. You don't know what you're talking about. I'm going to school you in 30 seconds and then you're going to learn and do a 180.” This is not how people operate. I really think it's a much different approach, which is what do we agree on with the minimum wage? So, I just think there's ways that we can inject new questions in our approach with people who we disagree with. So, I think you have to do the same with terrorism.

Anne Bradley outlines how economic thinking helps people recognize that terrorists act upon the same principles of behavior as other humans. Without this basic realization, it is difficult to understand why individuals choose to commit acts of terroristic violence, and, consequently, it becomes impossible to create a world free from terrorism. The axioms of human nature we use to understand other forms of human behavior are the key to correctly attribute the cause of terrorism. This understanding, combined with the institutional reforms, can help reduce or even eliminate terrorism.

Related Liberty Fund Network Content:
The Economics of al-Qaeda, by Anne Bradley, at Econlib
Institutions Have Consequences, by James M. Patterson, at Law & Liberty
Terrorism Remains a Real Problem, by Paul D. Miller, at Law & Liberty
Gary Shiffman on the Economics of Violence, an EconTalk podcast
David Skarbek on Prison Gangs and the Social Order of the Underworld, an EconTalk podcast

Extras: Anne Bradley on the Political Economy of Terrorism

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