Date of Award

May 2019

Document Type

Dissertation

Degree Name

Doctor of Philosophy (PhD)

Department

Economics

Committee Member

Michael Makowsky

Committee Member

Scott Barkowski

Committee Member

Robert Fleck

Committee Member

F. Andrew Hanssen

Abstract

Terrorism remains a controversial topic both in academia and in the public discourse. Building on previous social science research investigating the determinants of terrorism in a rational choice framework, I analyze terrorism through an economist's lens that assumes terrorist groups to be rational actors that use violence as a tool in pursuit of tangible political or ideological goals.

In the first chapter, I develop an economic model for the formation of alliances between terror groups, and why intergroup cooperation is more effective if the groups have a similar ideology. Groups cooperate in order to increase access to resources while maintaining the advantages of decentralization in the face of counterterrorism pressure. I empirically test the hypothesis that religious groups obtain greater operational benefits from cooperation than secular groups on a panel dataset containing detailed information on 255 terrorist groups between the years 1970 and 2014, finding that alliances formed by religious groups are more effective than those of their secular counterparts.

In the second chapter, based on the so-called "club model of terrorism," which postulates that terror groups may improve their capabilities by extracting sacrifices that screen out low commitment members and thus mitigating defection and free riding costs, I estimate the effects of these "commitment devices" on the incidence of terrorism. I do this by employing various observable proxies as exogenous shifters of the marginal product schedules of the ability of groups to induce commitment from members. Using a panel dataset containing all documented incidents of terror attacks from 2007–2013 at the state-year level, I find that the effects of the commitment devices are significant, both on overall terrorism and on suicide terrorism.

The third chapter examines the relationship between party politics and terrorism. Combining economic theory with historical case studies of militant organizations in Lebanon, Turkey, Israel, Palestine, Spain, Ireland, and South America, I analyze the interplay between terrorism and party politics. Within a "market" framework that includes a supply side and a demand side, I describe how events affecting the marginal costs and marginal benefits of violence may induce an entry into, or exit from, terrorism.

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