A CURSORY analysis of the START Global Terrorism Database reveals that over the past decade, Pakistan has had the highest number of terrorism-related deaths in the world.

In fact, the death toll exceeds the combined terrorism-related deaths for both Europe and North America. Hence, an understanding of terrorism, its dynamics, its causes, the reasons for its escalation and de-escalation is of utmost importance to Pakistan.

Unfortunately, policymakers, academics and politicians in Pakistan increasingly rely on speculation and their intuition alone to deal with this menace. The purpose of this article is to dispel the myth that reforms in education and economic growth alone will bring down terrorism levels.

Most certainly, education and growth policies should be pursued in their own right, but to expect that these policies will reduce terrorism is based on pure conjecture. A myriad of studies go against the “conventional wisdom” view of terrorism. The story goes that it is those poor, young, illiterate and brainwashed teens who have nothing to live for that turn to terrorism. In fact, nothing could be further from the truth.

Linking unemployment with crime and explaining optimal punishment designs had won Gary Becker the Nobel Prize in economics. He showed that criminals “rationally” decide to perpetrate crimes given the probability of getting caught and the severity of possible punishment. He further found that high unemployment and poverty rates are related closely to higher crime rates.

Hence, in a study of terrorism it was natural to study whether a high degree of impoverishment increased terrorism levels. This belief was shared by world leaders and top academics. For example, former US president George Bush argued: “We fight against poverty because hope is an answer to terror.”

Similarly, Jessica Stern of Harvard University’s Kennedy School of Government notes: “(The United States) can no longer afford to allow states to fail … new Osamas will continue to rise.” These views were shared by others such as Bill Clinton, King Abdullah of Jordan, the archbishop of Canterbury and Tony Blair.

Nevertheless, to the frustration of many academics, the simple positive relationship between poverty and (material) crime could not be extrapolated to a positive structural relationship between poverty and terrorism.

Not a single study could make a cogent case that terrorism had economic roots. This lack of evidence culminated in a recent review of the literature by Martin Gassebner and Simon Luechinger of the KOF Swiss Economic Institute.

The authors estimated 13.4 million different equations, drew on 43 different studies and 65 correlates of terrorism to conclude that higher levels of poverty and illiteracy are not associated with greater terrorism. In fact, only the lack of civil liberties and high population growth could predict high terrorism levels accurately.

So does this relation also hold for Pakistan? It appears so. Christine Fair from Georgetown University documents a similar phenomenon for Pakistan. By utilising data on 141 killed militants, she finds that militants in Pakistan are recruited from middle-class and well-educated families. This is further corroborated by Graeme Blair and others at Princeton University.

They too find evidence of a higher support base of terrorism from those who are relatively wealthy in Pakistan. In a robust survey of 6,000 individuals across Pakistan, it is found that the poor are actually 23 times more averse to extremist violence relative to middle-class citizens.

My own work too comes to a similar conclusion. Exploiting the econometric concept of Granger causality and drawing on data from 1973-2010 in Pakistan, I document a one-way causality running from terrorism to GDP, investments and exports.

The results indicated that higher incidence of terrorism reduced GDP, investments and exports. However, higher GDP, exports and investment did not reduce terrorism. The bottom line: when the economy was not doing well, terrorism did not increase and vice versa.

In the present context the Granger causality test ascertains what consistently happens first i.e. do high incomes reduce terrorism in the future rather than higher terrorism reducing incomes in the future and vice versa?

Alan Krueger from Princeton University seems to have an explanation for this “counter-intuitive” phenomenon. After analysing extensive micro- and macro-level data, he too concludes that in fact terrorists are relatively more educated and are recruited from wealthier families.

But he observes another pattern in data: a systematic relationship between political oppression and higher incidence of terrorism.

He relates terrorism to voting behaviour and concludes that terrorism is a “political, not an economic phenomenon”. He defends his results by arguing at length that political involvement requires some understanding of the issues and learning about those issues is a less costly endeavour for those who are better educated.

Just as the more educated are more likely to vote, similarly they are more likely to politically express themselves through terrorism. Hence, political oppression drives people towards terrorism.

To understand what causes terrorism, one need not ask how much of a population is illiterate or in abject poverty. Rather one should ask who holds strong enough political views to impose them through terrorism.

It is not that most terrorists have nothing to live for. Far from it, they are the high-ability and educated political people who so vehemently believe in a cause that they are willing to die for it. The solution to terrorism is not more growth but more freedom.

The writer is an advisor to the Dutch government on macroeconomic policy. His research interests include dynamics of terrorism.

Twitter: @mrsultan713



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