This paper investigates the relationship between economic development and domestic terrorism. We argue states at intermediate levels of development go through socioeconomic changes that result when traditional economies are replaced by modern economic relations, which may lead to grievances and social mobilizations conducive to terrorism. The effects of economic development should have a curvilinear effect on domestic terrorism. We test our theory using the GTD dataset and find support for our theory. We show that states at intermediate levels of economic development are more prone to domestic terror attacks than the poorest and richest states. Terror events would appear more likely where states fail to provide, or reduce, an economic safety net to mitigate the transformative effects of economic development. Moreover, the results show that states that are highly democratic, and long-enduring, are less prone to domestic terrorism than less democratic states.
Abadie, A., (2006), Poverty, Political Freedom, and the Roots of Terrorism, The American Economic Review, vol. 96, no. 2, pp. 159–177.
Berrebi, C., (2007), Evidence about the Link between Education, Poverty, and Terrorism among Palestinians, Peace Economics, Peace Science and Public Policy, vol. 13, no. 1, pp. 1–36.
Bloomberg, B., Hess, G., (2008), From (no) Butter to Guns? Understanding the Economic Role in Transnational Terrorism, in Keefer, P., Loayza, N. (eds.), Terrorism, Economic Development and Political Openness, Cambridge University Press, Cambridge, pp. 1–55.
Bloomberg, B., Rosendorf, B.P., (2009), A Gravity Model of Globalization, Democracy and Transnational Terrorism, in Hess, G.D. (ed.) Guns and Butter: The Economic Causes and Consequences of Conflict, MIT Press, Cambridge, pp. 125–156.
Bravo, A.B.S., Dias, C.M., (2006), An Empirical Analysis of Terrorism: Islamism and Geopolitical Factors, Defense and Peace Economics, vol. 17, no. 4, pp. 329–241.
Burgoon, B. (2006), On Welfare and Terror, Journal of Conflict Resolution, vol. 50, no. 2, pp. 176–203.
Crenshaw, M. (1981), The Causes of Terrorism, Comparative Politics, vol. 13, no. 4, pp. 379–399.
Daube, M. (2011), The Impact Of Development On Terrorist Activity: Does Development Decrease Terrorism? Master’s Thesis, University of Texas at El Paso.
Derin-Güre, P. (2009), Does Terrorism have Economic Roots? University of Boston working paper.
Dreher, A., Gassebner, M., (2008), Does Proximity to the United States Cause Terror? Economic Letters, vol. 99, no. 1, pp. 27–29.
Enders, W., Hoover, G., (2012), The Nonlinear Relationship Between Terrorism and Poverty, American Economic Review, vol. 102, no. 3, pp. 267–272.
Enders, W., Sandler, T., Gaibulloev, K., (2011) Domestic Versus Transnational Terrorism: Data, Decomposition, and Dynamics, Journal of Peace Research, vol. 48, no. 3, pp. 319–337.
Global Terrorism Database, START, accessed on 05/02/2011.
Kavanagh, J. (2011) Selection, Availability, and Opportunity: The Conditional Effect of Poverty on Terrorist Group Participation, Journal of Conflict Resolution, vol. 55, no. 1, pp. 106–132.
Krieger, T., Meierrieks, D. (2010) Terrorism in the Worlds of Welfare Capitalism, Journal of Conflict Resolution, vol. 54, no. 6, pp. 902–939.
Krueger, A.B., Laitin, D.D. (2007), Kto Kogo?: A Cross-Country Study of the Origins and Targets of Terrorism, Terrorism, Economic Development, and Political Openness, in Keefer, P., Loayza, N. (eds.), Terrorism, Economic Development and Political Openness, Cambridge University Press, Cambridge, pp. 148–173.
Krueger, A.B., Maleckova, J. (2003), Education, Poverty, and Terrorism: Is there a Causal Connection? Journal of Economic Perspectives, vol. 17, no. 4, pp. 119–144.
Kuznets, S., (1955), Economic Growth and Income Inequality, American Economic Review, vol. 45, no. March, pp. 1–28.
LaFree, G., Dugan, L. (2007), Introducing the Global Terrorism Database, Political Violence and Terrorism, vol. 19, no. 2, pp. 181–204.
Lai, B. (2007), Draining the Swamp: An Empirical Examination of the Production of International Terrorism, Conflict Management and Peace Science, vol. 24, no. 4, pp. 297–310.
Li, Q. (2005), Does Democracy Promote or Reduce Transnational Terrorist Incidents? The Journal of Conflict Resolution, vol. 49, no. 2, pp. 278–97.
Li, Q., Schaub, D., (2004), Economic Globalization and Transnational Terrorism: A Pooled Time-Series Analysis, The Journal of Conflict Resolution, vol. 48, no. 2, pp. 230–58.
Mousseau, M., (2002), Market Civilization and Its Clash with Terror, International Security, vol. 27, no. 3, pp. 5–29.
Mousseau, M., (2011), Urban Poverty and Support for Islamist Terror: Survey Results of Muslims in Fourteen Countries, Journal of Peace Research, vol. 48, no. 1, pp. 35–47.
National Consortium for the Study of Terrorism and Responses to Terrorism (START), (2012), Global Terrorism Database [Data file]. Retrieved from http://www.start.umd.edu/gtd..
Olson, M., Jr., (1963), Rapid Growth as a Destabilizing Force, The Journal of Economic History, vol. 23, no. 4, pp. 529–552.
Piazza, J., (2006), Rooted in Poverty? Terrorism, Poor Economic Development and Social Cleavages, Terrorism and Political Violence, vol. 18, no. 1, pp. 159–177.
Piazza, J., (2011), Poverty, Minority Economic Discrimination, and Domestic Terrorism, Journal of Peace Research, vol. 48, no. 3, pp. 339–353.
Ross, J. I., (1993), Structural Causes of Oppositional Political Terrorism: A Causal Model, Journal of Peace Research, vol. 30, no. 3, pp. 317–329.
Rostow, W.W., (1960), The Stages of Economic Growth: A Non-Communist Manifesto, Cambridge Press, London.
Sageman, M., (2004), Understanding Terror Networks, University of Pennsylvania Press, Philadelphia, PA.
The main objectives of Peace Economics, Peace Science and Public Policy are to further research in Peace Science and Peace Economics, to expose the scholarly community to innovative peace-related research, to disseminate the study of peace economics to a wider audience.