infonet-economy

Many governments as well as terrorist experts see the use of military and police forces as the only
way to effectively counter terrorism. The most effective negative sanctions are considered to be
military strikes, aggressive actions (including kidnapping and killing) against individuals known
or suspected of being terrorists, or against persons supporting and harboring terrorists. Overt and
covert military and paramilitary action is also thought advisable to pre-empt and prevent actions
by terrorist groups, as well as against states suspected of hosting or tolerating terrorists. This paper
argues that decentralization constitutes a powerful antidote as it strongly reduces the incentives for
terrorists to attack and because the expected damage suffered is much smaller than in a centralized
society. It moreover strengthens society, as economic, political and social decentralization (or
polycentricity) is an essential element of a free and vigorous society. This in turn makes a society
less vulnerable to terrorist attacks. Indeed, terrorism has no chance of success against a society that
actively guards its fundamental liberal institutions, of which decentralized decision-making forms
an essential part.