The Curvilinear Effects of Economic Development on Domestic Terrorism

This paper investigates the relationship between economic development and domestic terrorism. We argue states at intermediate levels of development go through socioeconomic changes that result when traditional economies are replaced by modern economic relations, which may lead to grievances and social mobilizations conducive to terrorism. The effects of economic development should have a curvilinear effect on domestic terrorism. We test our theory using the GTD dataset and find support for our theory. We show that states at intermediate levels of economic development are more prone to domestic terror attacks than the poorest and richest states. Terror events would appear more likely where states fail to provide, or reduce, an economic safety net to mitigate the transformative effects of economic development. Moreover, the results show that states that are highly democratic, and long-enduring, are less prone to domestic terrorism than less democratic states.