Does poverty lead to violence? (The other view)

This is a guest post from Ethan Bueno de Mesquita, responding to my skeptical talk a few weeks back.

It has become almost conventional wisdom among academics that poverty and lack of education are not important causes and terrorism. The source of this view is work done by Alan Krueger, both joint with Jitka Maleckova and alone, showing that terrorist operatives’ economic and educational statuses tend to lie around, or even slightly exceed, the averages in their societies. Based on this evidence, in his book Krueger concludes, “there is not much question that poverty has little to do with terrorism.”

I disagree. In a 2005 article, I showed that one could generate the prediction that terrorists aren’t poor or ill educated in a model where there is nonetheless mobilization due to economic opportunity costs.
The key is that terrorist organizations screen potential recruits on an ability dimension that is positively correlated with both efficacy as a terrorist and success in the labor market.

To see the problem this creates for the argument that the relatively high socio-economic status of terrorist operatives implies that the economy is not an important determinant of terrorism, suppose that terrorist organizations accept recruits only over some competence threshold and that competence is positively correlated with income or education. Suppose, further, that economic downturns increase mobilization (perhaps by decreasing opportunity costs). In such a world, because of screening, the terrorist operatives actually observed are neither poor nor poorly educated, just as in Krueger’s data. Yet the conclusion is not
true: the supply of acceptable operatives and, therefore, the expected level of violence is affected by economic factors.

Of course, this theoretical argument does not establish that poverty causes terrorism. But it does suggest that data showing that terrorist operatives are neither poor nor poorly educated doesn’t settle the question. Doing so requires answers to two questions: First, is there a correlation between socio-economic status and effectiveness as a terrorist operative? Second, do economic downturns increase the supply of high quality operatives?

Two recent empirical papers show that, at least for the case of the Israeli-Palestinian conflict, the answers are yes.

In a 2007 paper, Benmelech and Berrebi study detailed biographies of all Palestinian suicide bombers between 2000 and 2005 and find that more highly educated operatives are more likely to (1) be assigned to high value targets and (2) successfully complete missions.

In a forthcoming paper, Benmelech, Berrebi and Klor add micro-level data on the Palestinian economy and (using a difference-in-differences approach) find that changes in local unemployment affect the quality of terrorist operatives coming from a particular area, as measured by education, age, and experience. Moreover, they show that this improvement in the quality of operatives translates into a more effective terrorist organization. During bad economic times, terrorist organizations recruit higher quality operatives, attack higher value targets, and do so with greater success.

My overall take on this (which may, of course, suffer from the self-serving bias) is twofold. First, the theory and empirical evidence point toward a relationship between the economy and the effectiveness of terrorist organizations, even though terrorist operatives are neither poor nor poorly educated. Second, I think the development of this literature is both a useful example of how the iterative dialogue between data and theory enriches and adds nuance to our understanding of complicated phenomena and a valuable cautionary tale about not jumping to strong policy conclusions too quickly based on limited evidence.