A Strategic Analysis of Narcoterrorism: Counterterrorism, Terrorist Extortion, and Illicit Drug Trafficking

Subhayu Bandyopadhyay and Todd Sandler

No 2025-032, Working Papers from Federal Reserve Bank of St. Louis

Abstract: The paper presents a novel strategic analysis of narcoterrorism where a developing country’s terrorist group extorts home drug farmers to finance terror attacks. A developed country’s counterterror actions are motivated by the harm its residents endure from those attacks. The developed country’s counterterrorism involves efforts to destroy the drug crop abroad. The analysis begins with the drug price being exogenously fixed, followed by a “large-country case’’ with a market-determined drug price. The extension introduces a fourth participant, consisting of the developed country’s consumers whose purchases determine the drug demand. A subsequent extension allows for two drug-exporting countries along with their resident terrorist groups. Now, the drug price depends on terrorist extortion rates and the developed country’s counterterrorism associated with the two drug-exporting countries. With the last extension, novel drug-based counterterror transfers of terrorism occur between the drug-producing countries.

Keywords: narcoterrorism; transnational terrorism; counterterrorism; world drug prices (search for similar items in EconPapers)
JEL-codes: C72 D74 H56 (search for similar items in EconPapers)
Pages: 47 pages
Date: 2025-11-12
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://s3.amazonaws.com/real.stlouisfed.org/wp/2025/2025-032.pdf Full text (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:fip:fedlwp:102108

Ordering information: This working paper can be ordered from

DOI: 10.20955/wp.2025.032

Access Statistics for this paper

More papers in Working Papers from Federal Reserve Bank of St. Louis Contact information at EDIRC.
Bibliographic data for series maintained by Scott St. Louis ().