Terrorism in Africa and South Asia: Economic or Existential Good?

This paper considers the extent to which terrorism in Africa and South Asia is an economic good that can be explained within a standard rational choice model of optimizing agent, or an existential good explained by individuals who are present-aim oriented. Such a consideration is important for enabling security measures that are likely to be effective against terrorism in Africa and South Asia. If for example, terrorism is motivated largely by existential other-worldly goals, standard security measures that change the cost and benefits of terrorism are not likely to be effective in thwarting organized terror. On the other hand, if terrorism reflects a solution to a problem with identifiable costs and benefits that accord with the behavior assumed in economic theory, then it may be possible to contain terrorism by altering those costs and benefits. Our analysis of terrorism in Africa and South Asia utilizes data from the University of Maryland National Consortium for The Study of Terrorism and Response to Terrorism Center from 1980-2005. Our results suggest that at least in Africa and South Asia, terrorism is a standard economic good, and appears to be income elastic. As such anti-terrorist interventions need to be targeted towards not reducing poverty and underdevelopment per se, but at the complements of terror—those normal good/services that terrorists use as inputs.