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American Economic Review: Vol. 102 No. 3 (May 2012)


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The Nonlinear Relationship between Terrorism and Poverty

Article Citation

Enders, Walter, and Gary A. Hoover. 2012. "The Nonlinear Relationship between Terrorism and Poverty." American Economic Review, 102(3): 267-72.

DOI: 10.1257/aer.102.3.267


In spite of the common wisdom that poverty breeds terrorism, econometric tests usually find that terrorism is influenced by population and various measures of democratic freedom, but not per capita GDP. Unlike previous studies, we use a data set containing separate measures of domestic and transnational terrorism and estimate models allowing for a nonlinear relationship between terrorism and poverty. When we account for the nonlinearities in the data and distinguish between the two types of terrorist events, we find that poverty has as a very strong influence on domestic terrorism and a small, but significant, effect on transnational terrorism.

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Enders, Walter (U AL)
Hoover, Gary A. (U AL)

JEL Classifications

H56: National Security and War
I32: Measurement and Analysis of Poverty
K42: Illegal Behavior and the Enforcement of Law
O15: Economic Development: Human Resources; Human Development; Income Distribution; Migration
O17: Formal and Informal Sectors; Shadow Economy; Institutional Arrangements

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