We use aggregate country data as well as individual level survey to uncover, for the first time, the effect of extreme events such as natural disasters and terrorist attacks on entrepreneurial activity. We find that natural disasters and terrorist attacks influence individual perceptions of the...

► We identify research gaps and recent contributions in the economics of terror. ► We focus on the human drivers of insecurity as a key topic. ► Insecurity shapes growth, perceptions of individuals, and policy responses. ► The economics of security policies remains large under-researched.

We address the pitfalls of averaging by exploiting the longitudinal variation in aid to identify sudden and sharp increases in aid flows. Focusing on specific events, we test if aid accelerations correspond to policies and shocks in the recipient country. We find that positive regime changes and...