Unintended Consequences? The Impact of Targeted Economic Sanctions on International Terrorism

The effectiveness of economic sanctions cannot be thoroughly examined on the basis of their ability to achieve a stated goal alone. This paper takes abroad look into one of the possible unintended consequences associated with the use of economic sanctions the potential for increased political violence and terrorism. Past theoretical and empirical studies assume the economic impact of sanctions lead to an increase in terrorism, while other findings suggest that most terrorists come from relatively well-educated and high-income backgrounds. In this paper, I employ an event study model to analyze the incidence of terrorism between sender and target countries and exploit the various characteristics of sanctions to better understand the causal relationship be-tween sanctions and terrorism. My results suggest that, controlling for other determinants of terrorism at the country level, sanctions lead to an increase in the number of terrorist attacks leveled at individuals from sender countries by individuals from target countries for a significant period of time following their imposition and, in some cases, even long after the sanctions have been lifted.