Does democracy reduce terrorism in developing nations?

Subhayu Bandyopadhyay () and Javed Younas

No 2009-023, Working Papers from Federal Reserve Bank of St. Louis

Abstract: Understanding the causes of terrorism is important in predicting it and in developing an effective counterterrorism strategy. Data on the incidence of terrorist attacks and casualties suggest that domestic terrorism poses a substantially larger threat than transnational terrorism in developing countries. In spite of this fact, research has focused mostly on the latter. In analyzing both types, we find that political freedom and civil liberties affect domestic terrorism in a non monotonic way. Countries with either authoritarian regimes or with mature democratic systems experience less terrorism. This result has important policy implications: It suggests that one needs to be patient in the path to democracy, because the transition is likely to be associated with more violence. Interestingly, more religious fractionalization is associated with less terrorism in most of our specifications, while ethnic fractionalization raises domestic terrorism. On the other hand, poverty and lack of education do not appear to directly influence either domestic or transnational terrorism. All specifications show that “rule of law” reduces terrorism.

Keywords: Terrorism (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cdm and nep-pol
Date: 2009
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