Economic Conditions and Terrorism

Document Type



Economics (CMC)

Publication Date



We explore the links between the incidence of terrorism and the state of a country's economy. Groups that are unhappy with the current economic status quo, yet unable to bring about drastic institutional changes, may find it rational to engage in terrorist activities. The result is a pattern of reduced economic activity and increased terrorism. In contrast, an alternative environment can emerge where access to economic resources is more abundant and terrorism is reduced. Our empirical results are consistent with the theory. We find that for democratic, high income countries, economic contractions lead to increased likelihood of terrorist activities.

Rights Information

© 2004 Elsevier B.V.

Terms of Use & License Information

Terms of Use for work posted in Scholarship@Claremont.