Acts of terrorism can have a profound influence on both the lives of the victims and the region’s economy. Social effects of terrorism can include injury, death, and psychological trauma, while local and national markets can experience a downturn in both the short term and the long term.
Governments and international groups have historically had trouble agreeing on how to define terrorism. While many of the hallmarks of terrorism, such as violence, the intent to spread fear, and targeting of civilian populations, are agreed upon, attempts to create a widely accepted definition of terrorism have proven to be challenging.
The FBI defines terrorism as “the unlawful use of force and violence against persons or property to intimidate or coerce a government, the civilian population, or any segment thereof, in furtherance of political or social objectives.” This differs slightly from the definition used by the United Nations, "an anxiety-inspiring method of repeated violent action, employed by (semi-) clandestine individual, group or state actors, for idiosyncratic, criminal or political reasons, whereby - in contrast to assassination - the direct targets of violence are not the main targets."
Both definitions, despite their differences, acknowledge that terrorism uses violence as a means to cause fear, that acts of terrorism can be directed at civilian populations, and that the goals of terrorist groups can be varied and unclear.
For those who live in countries affected by terrorism, everyday life is colored by the uncertainty that comes with not being able to know if you are safe. Living in an area that is threatened by terrorist attacks can cause individuals’ idea of what level of personal safety is normal or acceptable to be altered. They may develop psychological coping mechanisms to deal with living with heightened risks of harm. Some individuals cope by learning to only pay attention to the things that they can control in their daily lives, as a way of relieving the anxiety that stems from trying to anticipate an unexpected terrorist attack.
In the aftermath of a terrorist attack survivors often suffer from post-traumatic stress disorder, anxiety, and major depression. Additionally, survivors of terrorist attacks are more vulnerable to substance abuse issues and psychosomatic symptoms after an attack.
Children are especially vulnerable to the negative psychological effects of living under threat of a terrorist attack. Children who have survived a terrorist attack, have family members who have experienced an attack, or who have simply seen footage of a terrorist attack on television may be more likely than adults to suffer from PTSD, anxiety, or depression as a result.
The economy of an area affected by a terrorist attack suffers an immediate impact due to loss of property and funds used to repair building and infrastructure damage. It also suffers long term effects as financial markets slowly recover from the shock of the attack.
The largest effect on the economy, however, is a rise in spending on security and defense, and the impact on supply chains of enhanced security at land, sea, and air border crossings. Spending on defense and national security tends to increase by a large amount in the months following a terrorist attack, as a nation takes steps to make its borders more secure. This increased border and checkpoint security can make it significantly more expensive to move products and goods into and out of the country. While these economic effects can be significant, their overall impact tends to stabilize over time as a country regains its footing in the years after an attack.