Socio-Economic Antecedents of Transnational Terrorism: Exploring the Correlation

Policies related to thwarting transnational terrorism have been at the forefront of political and social debates. In this paper we empirically examine the impacts of socio-economic conditions on the probability and frequency of participation in transnational terrorism events. We use count data analysis techniques in combination with the newly combined annual data on transnational terrorism and socio-economic variables from 1980 to 2000. We find strong correlations between economic conditions and probability and frequency of participation in terrorism events. Specifically, one of the key findings is a non-linear relationship between per capita income and participation in transnational terrorism. The results suggest that extreme poverty may preclude the opportunities to participate in terrorism acts while relative alleviation of poverty levels may provide marginal resources to participate in terrorism acts and materialize accumulated hatred. Similarly, education has a non-monotonic effect on the participation in terrorism acts, i.e., improving labor force education from primary to secondary level may increase frequencies of transnational terrorism. On the other hand, improving the labor force education from secondary to tertiary level may decrease the frequencies of transnational terrorism events. The results also indicate that economic freedom, openness to trade, income equity, and religion play a significant role in the probability and frequency of transnational terrorism events. JEL classification: D74, F51, O15