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a blog from young economists at Nova SBE

Poverty and terrorism: a (still) missing link

The 13th November 2015 will stay as a permanent stain in the Paris’ citizen memory as well as in the contemporary history: after the 9/11 in the United States and several episodes of bomb attacks around Europe, the Islamic terrorism hit again the Western world in one of its most representative cities. This horrific and heinous action, however, does not have to be considered “surprising”, as Rosa Brooks argued in Foreign Policy, in the aftermath of the event. Even before these tragedies, «we need to stop viewing terrorism as shocking and aberrational, and instead recognize it as an ongoing problem to be managed».

In his recent visit in Kenya, Pope Francis stated that «experience shows that violence, conflict and terrorism feed on fear, mistrust, and the despair born of poverty and frustration». Along the same lines, policymakers have exhibited a consistent tendency to consider poor living condition as a primary motivation for terrorist acts.  The sentence that the U.S. President George W. Bush pronounced in Monterrey (Mexico) in 2002, during the first phases of the War in Afghanistan, is significant for revealing the convictions of that time: «We fight against poverty because hope is an answer to terror».


Nevertheless, the evidence from economic research points in the opposite direction: poverty seems to have no direct relationship with terrorism, while civil liberties and political freedom have been found to explain, at least partly, the pattern of terrorism around the world.

The idea that poverty can initiate terrorism has dominated much of the debate for a long period: this notion stems from the results of the research in the field of the economics of conflict. We can recollect, among the most famous and recent contributes, Collier and Hoeffer (2004) who show that economic variables are powerful predictors of civil war, while political variables have low explanatory power.

Originating in the 2000s, however, new disposable data and empirical studies have challenged this view, leading to surprisingly opposite findings. In particular, several studies have failed to find any direct link between education, poverty, and the propensity to participate in terrorism.

The first surprising result was presented in the economic debate by Krueger and Maleĉková in the New Republic. When analysing data on support for attacks against Israeli targets from public opinion polls conducted in the West Bank and Gaza Strip, they found that support for violent attacks did not decrease with higher education and living standards. On the contrary, better living standards and education were positively associated with participation in Hezbollah. Moreover, Israeli Jewish settlers who attacked Palestinians in the West Bank in the early 1980s were overwhelmingly from high-paying occupations. Terror groups seemed to actively select upper class and more educated individuals, instead of recruiting from the poor segments of the population.

The following studies started assuming a global perspective, in attempting to reach general and externally valid results. Among the others, Abadie (AER, 2006) strengthens the previous findings by exploring the determinants of both domestic and transnational terrorism. Furthermore, the implementation of an instrumental variable approach (namely, “landlock” for GDP per capita) corrected for reverse causation, suggesting a causal relationship between terroristic risk and political freedom (but not with economic development).


Nonetheless, as Prof. David Sterman argued in a recent article in Time, we should not dismiss poverty’s possible role in terrorism yet. In fact, the results seem to change consistently given the dataset that is used and the explanatory variables that are taken into consideration[1]. Assuming previous studies still explain the dynamics in the cases we face today could lead to misreading of new and potentially different phenomena (e.g. Daesh). The evidence about terrorism needs to be reassessed and updated, in view of recent developments and the collection of novel data.

In particular, research needs to integrate an alternative approach in the investigation of the roots of terrorism, assuming a “social” point of view. In my opinion, welfare policies are likely to reduce terrorism because they help social cohesion, by reducing economic insecurity, inequality, and religious-political extremism. Thus, countries where there exists a more advanced and generous welfare system should experience fewer terrorist attacks on their soil and see less of their citizens perpetrating terrorism abroad. I believe that this line of research has not been explored appropriately in the past literature and more studies might shed new light on the fundamental roots of terrorism.

By Matteo Ruzzante (#855)


[1] Some – less renowned – papers that reached diverging results are Derin-Güre (2009), Freytag et al. (2009) and Burgoon (2006). The latter one, in particular, indicates that a country’s welfare efforts negatively correlate with transnational or total terrorist incidents on its soil, as well as transnational terrorism perpetrated by its citizens. Such findings suggest that strengthening social policies at home and abroad may not only serve redistributive or development goals but also help combat terrorist violence.

Author: studentnovasbe

Master student in Nova Sbe

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