Essays on the Law and Economics of Terrorism in Pakistan

This thesis explores the origin of sectarian violence and terrorism, the impact of terrorism risk on the individual's democratic preferences and the deterrence effect of the law enforcement interventions against terrorism and violence over time and space in Pakistan. Chapter 3 discusses exposure to the risk of terrorism and its impact on the individual's preferences for liberal democratic values. Exploiting the individual level socio-economic, religious and political information collected from the 6,000 respondents, the chapter empirically evaluates and presents evidence that acts of terrorism negatively affect preferences towards democratic institutions. The persistent shocks of terrorism decrease the support for the elected legislators while increasing it for the law enforcement institutions like the armed forces. The deterrence effect of the exogenous intervention by law enforcement institutions on different types of tribal violence is explained in the 4th chapter. Approximately, 3% territory in the North-West of Pakistan is ungoverned but constitutionally presented in the lower and upper houses. It has never been exposed to modern law enforcement institutions like the judiciary, police and military. Thus, it experienced pervasive tribal violence, revenge killings and drug trafficking over the years. The incident of the September 11, 2001 and the consequent US invasion of Afghanistan provided an exogenous shock to the military institution to enter the ungoverned space for the first time. The empirical results show that the intervention significantly decreases different types of violent conflicts in the ungoverned terrain. Finally, chapter 5 explores criminologists' hypotheses on the displacement and diffusion of crime control benefits to test the displacement and diffusion effects of anti-terrorism interventions. The empirical analysis highlights that anti-terror interventions displace terrorist activities from the treated to the non-treated districts, thus, impose a significant public cost on the neighborhood.