Introduction Popular wisdom in the burgeoning literature on terrorism focuses on the economic motivations of terrorists. “We fight against poverty,” President George W. Bush explained in Monterrey, Mexico, on March 23, 2002, “because hope is an answer to terror.” Stern (2003) also draws a direct connection between poverty and terrorism. Though poverty is an attractive answer to the question of “why terrorism?”, the data do not lend much support for it. Macroeconomic shifts generally fail to map on to changes in terrorist activity. For example, in the late 1990s and 2000, when terrorism reached new heights against Israeli citizens, the typical Palestinian was reporting a rosier economic forecast and unemployment was declining. Using a longer time series, Berrebi (2003) finds little correlation between economic conditions in the West Bank and Gaza Strip and the number of terrorist incidents against Israel. An even more perplexing problem for the poverty thesis arises on the microlevel. Several studies at the individual level of analysis have failed to find any direct connection between education, poverty, and the propensity to participate in terrorism (Russell and Miller 1983; Taylor 1988; Hudson 1999; Krueger and Maleckova 2003; Berrebi 2003; Atran 2003). If anything, those who participate in terrorism tend to come from the ranks of the better off in society. Those who claim a connection between poverty and terrorism could respond that at least on the microlevel, well-to-do citizens become terrorists out of public spiritedness for their impoverished fellow citizens, and organizations choose them to perform these tasks because of their reliability and skill.
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