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Working Paper 2009-023B

"What Spurs Terrorism in Developing Nations?"
by Subhayu Bandyopadhyay, and Javed Younas

Understanding the causes of terrorism is important in predicting it and in developing an effective counterterrorism strategy. Data on the incidence of terrorist attacks and casualties suggest that domestic terrorism poses a substantially larger threat than transnational terrorism in developing countries. In spite of this fact, research has focused mostly on the latter. In analyzing both types, we find that political rights and civil liberties affect domestic terrorism in a nonmonotonic way. Countries with either authoritarian regimes or with mature democratic systems experience less terrorism. This result has important policy implications: It suggests that one needs to be patient in the path to democracy, because the transition is likely to be associated with more violence. Interestingly, more religious diversity and “rule of law” seem to discourage both domestic and transnational terrorism, while ethnic fractionalization raises domestic terrorism. However, poverty and illiteracy do not appear to be directly linked with either.

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Category > Applied Microeconomics
Category > International
Author > Subhayu Bandyopadhyay
Research Papers and Publications: JEL Code > D74
Research Papers and Publications: JEL Code > H56