What Determines the Global Terrorism? An Empirical Investigation for Developed and Developing Countries.


Byline: Farhat Rasul and Nasir Iqbal


In an era of geopolitical complexity, asymmetric warfare has increased the threat of terrorism. For more than fifteen years since September 2001, the international community continues to face the unequal expansion of terrorism (Anderson, 2012). Except the Central America and the Caribbean region, the whole world have experienced terrorism (GTI 2017).Since 2002, few researchers have explained the models for the rise of domestic terrorism. The growing influence of extremists have increased the complexity of modern terrorism threats affecting not only for the developing countries but also the international security (Coggins 2014 and Wither 2016). Following the announcement of President George W. Bush's for counter terrorism and war in 2001, many academic scholars have tried to investigate the "main" factors of domestic and transnational terrorism, focusing on the motivations at the individual or group level (Abrahms 2013 and Coggins 2014).

The phenomenon of poverty and unemployment are the most important determinant of terrorism discussed in literature. According to this proposal: "Poverty of resources, with prospects, choices and respect, will contribute to the development of terrorism" (O'Neill 2002). The economically vulnerable individuals can increase resentment and despair and support political extremism. Moreover, poverty often leads towards poverty for underdeveloped, fragile governance and state failure which hastens fanaticism. Karin von Hippel, are of the view that particular socioeconomic conditions can explain so-called "enabling environments," which obviously increase terrorist inspiration. The countries with such an environment are Afghanistan, Algeria, Georgia Sudan, Pakistan, Somalia and Yemen where national and transnational terrorist organizations can find a vacuum of authority to operate their activities.

The environment contributing to the rise of terrorism include both international, national and regional political situation, such as political groups and universities, where many terrorists first explore ideology, revolutionary ideas and participate in radical groups. Miller, 2006 analysed that violent terrorists' are motivated by ideology and money to fulfil their fundamentalism and the needs of their families. Some studies find the positive relationship between terrorism and education as more educated people are the more bloody terrorists.

Some other theoretical studies in the literature reveal the fact that the abundance of natural resources increases the possibility of terrorist activities (Ali, 2015). Also that the armed violence to get control over the natural resources fosters environmental degradation. According to ShrivastavaandMitroff(2005), the violent activities to dominate the resources accelerate the indefensible practices for energy, agriculture, and forestry. Since the terrorism and counterterrorism activities are depleting the agricultural, forestry and energy production practices, hence the natural resource adjusted savings1 is a closer proxy to measure the natural cost of terrorism (Bannon, Collier, andWeltbank, 2003).

Sometimes, eliminating the terrorists worsens the conditions that spawned them. The more we win the current war, the more we lose the real struggle. We need to create ecologically sustainable societies. The ecology of terrorism is the scarcity of natural resources and the unequal distribution and control of resources that cause poverty and living condition discontent. This discontent spills over into violence, which, in turn, causes the displacement of more people. The displaced population often deprives of the control over their lands, minerals, critical natural resources and livelihoods that stakes the social and political peace. The displaced population then becomes the sourcesfor the political gains as the crime and violence are established through assassinations, target killings.

The violation of human rights, alienation and humiliation are sources of Terrorist acts. Evidence of the perpetration of terrorist violence is the "burning in feeling of injustice and loss" (Hoffman 1998) and "Despair and uncontrollable rage" (Stern 2003). A similar understanding can be held between groups who believe that a political or social order denies their rights, on the basis of social, linguistic, cultural or ideological differences. The proliferation of violence and terror caused by hunger, poverty, economic slavery, social and political legitimacy, risk and extreme insecurity are the components that lead the economies towards failed states.

The terrorist's activities always require financial support which are often financed by money laundering techniques. The unlawful act of money laundering undermines the efficiency of financial institutions as it does not require the use of formal financial institutions. It brings financial mutilations, disinvestment, loss of incomes, political unsteadiness and hence the execution of a nation.

The United Nations Office on Drugs and Crime revealed that the use of the internet, as a mean of communication, endures the terrorist activities by providing the terrorist's a platform to approach the targets easily. Further, terrorists use the source of internet to propagate, recruit and radicalize their financing, training and planning (UNODC)2. Tsfati andWeimann, (2002) and Conway, (2006) revealed that terrorists have more control over their internet sites for fundraising, and recruiting the new faithful to achieve their political goals. Weimann, (2004), Kaplan (2009) and Morozov, (2012) found that internet users act as a critical vehicle for the rapid circulation of news, rumours, and hoaxes regarding terrorist activities.

  1. Objective and Significance of the Study

    The main objective of this study is to explore the causes of terrorism for the world economies. A panel of 85 world economies for the period of 2012 to 2016 has been selected and the system GMM estimation technique has been used to analyse the objective of the study. To illustrate the comparison between developed and developing countries, this study has segregated the economies according to the stages of development.

    Most analysts in literature focus on the economic, social, and political aspects, however, little research has been done to explain the further reasons of the phenomenon. The ever-changing phenomenon of terrorism is out of the bag of these old hypothesizes as there are many other factors that are responsible to fuel up the terrorist's activities. This study is an effort to eliminate this rough gap in the existing literature. This study go beyond the root causes of terrorism by developing the explanatory indicators for the growth of the terrorism. The current literature lacks the criminological causes of terrorism such as natural resource depletion, state fragility, money laundering and usage of inert net. The lack of criminological factors in the empirical literature is a major gap in the field of the causes of terrorism.

  2. Review of Literature

    This section provides an overview of literature on the components and constituents of terrorism. First, some theories of terrorism because they are able to guide the debate about the on to genesis of terrorism. Then the discussion about other dynamics contributing the terrorism are discussed. Finally, the study describes the general limitations of the literature to study the modern determinants of terrorism and violence.

    The theories of social sciences like biological, instinct, drive, cognitive and social learning all explain the different forms of terrorist violence. According to the general strain theory, terrorism violence is more life-threatening than common crime (Victoroff, 2005; Hoffman, 2006; Robison, Crenshaw, and Jenkins, (2006); Piazza, 2006;Agnew, 2010). Terrorism follows the instrumental and organizational approaches (Crenshaw, 2010). The instrumental approach is based on terrorist ideologies3 (Borum, 2010) whereas the organizational approach explains the inter linkages of terrorist groups having similar objectives. The theoretical literature explains that terrorism is a tool of political actors and organisations who deliberately choose violence to change the political and social conditions (Crenshaw, 2010) for their survival.

    In addition, social, economic and political grievances are the major causes of national and transnational terrorism (Rosenfeld, 2004: Schneider, Bruck, and Meierrieks, 2010; Butler, 2015; Piazza, 2017).

    The economic perspectives of terrorism assume that terrorists are the rational actors who respond to incentives (Caplan, 2006). They maximise their utility function by adopting terrorist actions, given costs, benefits constraint (Sandler and Enders 2004). The utility is maximised when marginal benefits are greater than marginal costs. The benefits of terrorism are derived from the objectives and goals set by terrorists whereas costs include the opportunity cost of terrorist violent behaviour and resources (Frey, Luechinger, andStutzer, 2004). The country-specific factors which affect the terrorist's behaviour are also based on cost and benefit matrices (Schneider, et al., 2010). The typical terrorist supporter diverges from the rational economic theory which maximizes the utility of individuals.

    But active terrorists believe afterlife rewards which narrow their self-interests or stray them from rational expectations but the suicidal terrorists perhaps disrupt the both. These outliers believe the popularity of irrational political and religious beliefs have severe social costs.

    The empirical studies in literature evaluate a number of explanatory factors in determining the growth of terrorism (Kegley 1990; Eyerman 1998; Abadie 2004; Burgoon 2006; Crenshaw 2010; Ghatak 2016; Krueger and Laitin 2007). However, the importance of one particular factor is overshadowed by another keeping the constant development and an infinite...

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