Unemployment, Inequality and Terrorism: Another Look at the Relationship between Economics and Terrorism

Authors

Kevin B. Goldstein, Dartmouth College

Abstract

This paper builds on existing research on the determinants of terrorism by looking at new measures of poverty in addition to political freedom, population fractionalization, and other country characteristics. The findings of this paper reinforce the conclusions of existing literature that political freedom is a key determinant of terrorism, with the greatest risk coming from countries that are middling between liberal democracy and authoritarian control. Further, this paper supports recent conclusions that linguistic fractionalization and geography are both related to terrorist risk as well. The new finding in this paper is that adult unemployment rate is also a significant predictor of terrorism, though it can only explain a small portion of the overall terrorist risk in a country. This paper also suggests that the Gini Index of economic inequality may also have a significant correlation with terrorist risk. The results overall imply that exclusion from the economy can be a motivator for terrorism just as exclusion from politics can be, regardless of the overall wealth of a country.

Recommended Citation

Goldstein, Kevin B. (2005) "Unemployment, Inequality and Terrorism: Another Look at the Relationship between Economics and Terrorism," Undergraduate Economic Review: Vol. 1: Iss. 1, Article 6.
Available at: https://digitalcommons.iwu.edu/uer/vol1/iss1/6