Essays on terrorism: its effects on subjective wellbeing, its socio-economic drivers, and the related attitudes Author Vorsina, Margarita Published 2017 Thesis Type Thesis (PhD Doctorate) School Dept Account,Finance & Econ DOI https://doi.org/10.25904/1912/3246 Copyright Statement The author owns the copyright in this thesis, unless stated otherwise. Downloaded from http://hdl.handle.net/10072/373030 Griffith Research Online https://research-repository.griffith.edu.au Griffith Business School Submitted in fulfilment of the requirements of the degree of Doctor of Philosophy by Margarita Vorsina September 2017 Essays on terrorism: its effects on subjective wellbeing, its socio-economic drivers, and the related attitudes Margarita Vorsina Bachelor of Economics with Honours Master of Economics with Honours Department of Accounting, Finance and Economics Griffith Business School Griffith University Submitted in fulfilment of the requirements of the degree of Doctor of Philosophy September 2017 Statement of Originality This work has not previously been submitted for a degree or diploma in any university. To the best of my knowledge and belief, the thesis contains no material previously published or written by another person except where due reference is made in the thesis itself. ____________________________ Margarita Vorsina i Abstract Terrorism is an enduring consequence of the willingness of humans to use violence with the goal of affecting politics or of forcefully promoting ones ideology by inducing fear in the populace. Alarmingly, the frequency of terror attacks appears to be increasing. The most recent Global Peace Index Report notes that their terrorism impact indicator recorded the greatest deterioration over the period from 2008 to 2017, with 60 per cent of countries having higher levels of terrorism than a decade ago (Institute for Economics and Peace, 2017). The main objective of this research is to investigate socio-economic reasons for terrorism and the effects of terrorism on subjective wellbeing. In doing so, this research estimates the association between terrorism, self-reported life satisfaction and national income; explores the effect of the 2002 Moscow theatre siege on the level of expectations of life in the future of the Russian population; assesses the role of social dominance orientation (SDO) in explaining individuals’ fear of experiencing a terrorist attack and support for counter-terrorism policies; and analyses the effect of ethnic economic inequality on domestic terrorism. The results indicate that on the macroeconomic level terrorism is negatively associated with life satisfaction. This suggests that the social costs of terrorism are potentially much higher than the economic costs, and measuring only the conventional economic costs of terrorism significantly underestimates the true costs. When a different measure of wellbeing is used in the analysis, the net effect of a terrorist incident may not necessarily be negative. The findings indicate that people often experience positive reactions after a terrorist attack. These results are explained by the theory of post- traumatic growth – a theory that refers to the positive psychological change experienced ii as a result of adversity, with terrorism incidents inadvertently promoting more meaningful interpersonal relationships, new views of the self and new views of the world. This suggests that the wellbeing effects of terrorism are complex: to expand the understanding of the social consequences of terrorism it is necessary to pay equal attention to the positive effects of terrorism. This research expands the knowledge of the socio-psychological determinants of attitudes towards terrorism and counter-terrorism policies. The results show that social dominance orientation – an individual’s preference for inter-group hierarchies within a social system or group-based discrimination – positively predicts support for ‘defensive’ counter-terrorism policies, fear of terrorism and fear of Islamic extremism. It also predicts the relationship between social dominance orientation and support for defensive policies is mediated by fear. These findings have policy implications for the study of individuals’ willingness to forgo liberties in order to preserve the inter-group hierarchies and the conditions of support for liberty-infringing counter-terrorism policies. Finally, the results of this research indicate that ethnic economic inequality is robustly, positively and significantly associated with domestic terrorism. This in turn has an important implication that governments should pursue policies that promote the economic and social inclusion of minority ethnic groups. iii Acknowledgements First and foremost, I would like to sincerely thank my supervisors Professor Christine Smith, Associate Professor Chris Fleming and Associate Professor Matthew Manning. This research would not have been completed without their advice, guidance and support. I would also like to convey my gratitude to all the members of the academic and administrative staff the Centre for Aboriginal Economic Policy Research and the Centre for Social Research and Methods (CSRM) at the Australian National University (ANU). I am especially grateful to the director of the CSRM, Professor Matthew Gray, for providing me the opportunity to stay as an exchange student at the ANU for one and a half years. I would like to thank my other co-authors, Dr. Jill Sheppard and Dr. Chris Ambrey, for their invaluable contribution to the papers as well as continuous support throughout my candidature. I am very grateful to Griffith University for awarding me the tuition fee and living allowance scholarships, without which I would not have been able to undertake PhD studies in Australia. My appreciation is extended to the Department of Accounting, Finance, and Economics at Griffith University; as well as to Griffith Graduate Research School for their support. I would also like to thank Jennifer Beale for her editorial assistance. I was fortunate to present my research at various conferences, including the 2016 SIBR Conference on Interdisciplinary Business and Economics Research in Kuala Lumpur, Malaysia; the 8th Australasian Public Choice Conference in Brisbane, Australia; and the 44th Australian Conference of Economists in Brisbane. I wish to thank all the iv discussants and participants for their feedback. I would like to thank my family and friends for their love, encouragement and moral support throughout my candidature. Finally, I am extremely grateful to my partner, Dr. Chin Hong Ooi, for always being there for me whenever I needed. v List of publications by candidate Journal articles Vorsina, M., Manning, M., Fleming, C., Ambrey, C., Smith, C. (2015). The welfare costs of terrorism. Terrorism and Political Violence, DOI: 10.1080/09546553.2015.1111207 Vorsina, M., Manning, M., Fleming, C., Smith, C. (forthcoming). The Effect of the Moscow Theatre Siege on Expectations of Wellbeing in the Future. Journal of Interpersonal Violence. Conference papers Vorsina, M., Manning, M., Fleming, C. 2016. The effect of Moscow theatre terrorism attack on Life Satisfaction of Russian population. SIBR Conference on Interdisciplinary Business and Economics Research, Kuala Lumpur, Malaysia Vorsina, M., Manning, M., Fleming, C. 2015. The effect of Moscow theatre terrorism attack on Life Satisfaction of Russian population. 8th Australasian Public Choice Conference, Brisbane, Australia Vorsina, M., Manning, M., Fleming, C., Ambrey, C., Smith, C. 2015. The welfare costs of terrorism. 44th Australian Conference of Economists, Brisbane, Australia vi Table of Contents 1. Background to thesis............................................................................................ 1 1.1. Defining terrorism.................................................................................................. 3 1.2. Trends in terrorism since 1970 ............................................................................. 5 1.3. Key gaps in existing literature .............................................................................. 8 1.4. The approach of this research and its expected contribution .......................... 10 1.5. Research questions ............................................................................................... 12 1.6. Structure of the Thesis ......................................................................................... 13 2. Overarching Literature Review related to Thesis .......................................... 18 2.1. Definition of terrorism ......................................................................................... 18 2.2. Theoretical background ...................................................................................... 22 2.2.1. Rational behaviour of terrorists ..................................................................... 22 2.2.2. Rational Choice Model .................................................................................. 25 2.2.3. Limitations of the rational choice model ....................................................... 29 2.3. Socio-economic determinants of terrorism ........................................................ 31 2.3.1. GDP capita and terrorism .............................................................................. 31 2.3.2. Democracy and terrorism .............................................................................. 32 2.3.3. Civil war and terrorism.................................................................................