321 Volume 31, Number 3, Fall 2006 International Terrorism in Latin America: Efforts on Foreign Investment and Tourism James M. Lutz * Brenda J. Lutz Indiana University-Purdue University at Fort Wayne It has been suggested that terrorist attacks can have serious economic consequences for the countries where the attacks occur. An analysis of 23 countries in Latin America between 1969 and 1988 indicated that incidents of terrorism had only modest negative effects on foreign direct investment in these countries even though foreign operations of multinational corporations were frequent targets in this period. The tourist sector, however, was more susceptible to negative influences from terrorist violence. Key Words: Latin America, Terrorism, Tourism, Direct Foreign Investment Introduction In recent years, major terrorist attacks have had a many effects on political systems, economic systems, and societies in general. Among the possible consequences of terrorism is the potential for such incidents to disrupt both domestic and international economic interactions. Among the potential effects that terrorist violence can have would be declines in foreign direct investment and reductions in tourist visits to the countries that have faced greater levels of terrorist violence. These negative effects of terrorism might vary depending upon a number of circumstances, including the frequency and severity of attacks, and other factors such as the types of targets chosen. While the potential for economic disruption is clearly present in the twenty-first century, it is important to assess the economic effects of attacks in the past as well. The analysis to follow will attempt to measure some of the international economic impacts of terrorist attacks in twenty-three Latin American countries during the twenty years between 1969 and 1988, and to determine if the countries suffering from greater levels of international terrorist activity actually did experience greater negative economic effects. * Department of Political Science, Indiana University-Purdue University at Fort Wayne, Fort Wayne, IN 46805-1499, Address for correspondence: Dr. James M. Lutz, Department of Political Science, Indiana University-Purdue University at Fort Wayne. Fort Wayne, IN 46805- 1499 Email: HYPERLINK mailto:lutz@ipfw.edu lutz@ipfw.edu