The Nonlinear Relationship between Terrorism and Poverty
American Economic Review · 2012 · Volume 102 · Issue 3
Abstract
In spite of the common wisdom that poverty breeds terrorism, econometric tests usually find that terrorism is influenced by population and various measures of democratic freedom, but not per capita GDP. Unlike previous studies, we use a data set containing separate measures of domestic and transnational terrorism and estimate models allowing for a nonlinear relationship between terrorism and poverty. When we account for the nonlinearities in the data and distinguish between the two types of terrorist events, we find that poverty has as a very strong influence on domestic terrorism and a small, but significant, effect on transnational terrorism.
Keywords
National Security and War, Measurement and Analysis of Poverty, Illegal Behavior and the Enforcement of Law, Economic Development: Human Resources, Human Development, Income Distribution, Migration, Formal and Informal Sectors, Shadow Economy, Institutional Arrangements
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