Terrorist Funding and Mobilization : How Do Remittances and Economic Ineguality Impact the Occurence of terrorist Events?

Abstract

There are few studies done on the use of remittances to finance terrorism. Remittances have previously been seen in connection with development policies but have in recent years been linked to funding of terrorist groups. The main objective of this study is to identify the relationship between remittances, economic inequality and terrorist events. Using remittance data from the World Bank the thesis aims to study how remittances, as well as underlying economic inequality might impact the occurrence of terrorist events. Using count data on domestic terrorist events and transnational terrorist events (by perpetrators country of origin) and applying negative binomial regression we study how remittances and economic inequality influence the occurrence of terrorist events. The findings support some of the hypotheses. There exists a relationship between increased transnational terrorism and remittance inflows, even when controlling for economic inequality. Contrary to previous studies no significant relationship can be found between domestic terrorism and remittance inflows. Vertical inequality, in the form of economic inequality, is significant across all domestic and transnational models. There are clear indications that the relationship between remittances and transnational terrorism warrants further study