International terrorism, international diversification

International terrorism was once a new thing. And its‘spread’was a major concern. For example, Brian Jenkins (1974) called international terrorism‘a new kind ofwar- fare’. Midlarsky, Crenshaw &Yoshida (1980) devoted their attention to the factors driving the ‘contagion’ of international terrorism. In an approach that we have encountered in other places (copycat behaviour), Midlarsky, Crenshaw & Yoshida (1980) and other terrorism researchers following them disregard the agency of the terrorists and the decision-making processes. The terrorism researchers want to depict the decision to operate across borders as the outcome of a pure contagion process. Although there is something elegant about diffusion processes, they are external to the decision-maker. Using them to explain aspects of human action that are the outcome of human decisions leads us to overlook the rationale for those decisions. Carlos the Jackal, Black September and many of the groups that were active in West Germany (Figure 6.4) operated internationally. Apart from the obvious (e.g. that there were targets in different locations), what did they have to gain by doing international terrorism rather than focusing on a particular geographic location?

A simple, yet powerful answer presents itself. What they had to gain was all of the gains from diversification that we have been discussing. It is the same rationale that prompts international diversification among investors. If we were to calculate the efficient set for any payoffs (fatalities, media attention, recruits, supporters, financing etc.), it would be located somewhere in risk-reward space,just like the diagrams we have presented previously. What extra dimension does international diversification add to this picture? It pushes the entire efficient set further to the North-West, allowing higher expected payoffs with less risk. International diversification works because the payoffs across different locations are not perfectly positively correlated. An armed assault in Berlin might receive some amount of media attention while an armed assault in Paris receives a different amount. If a group or individual terrorist operates simultaneously or over time across different locations, the overall expected payoffs to such an ‘international attack method combination’ will be higher for each level of risk than for ‘homebound’ terrorists. There is no need for a contagion process in our explanation when there are incremental payoffs available even to naive decision-makers.

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