Does Income Inequality Lead to Terrorism?

36 Pages Posted: 21 Apr 2016

See all articles by Tim Krieger

Tim Krieger

University of Freiburg - Department of Economics

Daniel Meierrieks

WZB Berlin Social Science Center

Multiple version iconThere are 2 versions of this paper

Date Written: March 23, 2016

Abstract

We analyze the effect of income inequality on terrorism for a sample of 114 countries between 1985 and 2012. We provide evidence, robust to various methodological changes (e.g., different dependent variables, instrumental-variable approaches), that higher levels of income inequality are associated with more terrorism. Consistent with relative deprivation theory, we argue that this effect is a direct consequence of frustration over the distribution of income within a society, resulting in terrorism to voice dissent and achieve a redistribution of wealth. Furthermore, we provide evidence of an indirect effect of inequality on terrorism, where inequality may also contribute to terrorism by leading to weaker institutions. Finally, we show that redistributional efforts can be effective in reducing inequality and, consequently, terrorist activity.

Keywords: income inequality, terrorism, Gini coefficient, relative deprivation, redistribution

JEL Classification: D740, I380, O150, C360

Suggested Citation

Krieger, Tim and Meierrieks, Daniel, Does Income Inequality Lead to Terrorism? (March 23, 2016). CESifo Working Paper Series No. 5821. Available at SSRN: https://ssrn.com/abstract=2766910

Tim Krieger (Contact Author)

University of Freiburg - Department of Economics ( email )

University of Freiburg
Wilhelmstr. 1b
Freiburg, D-79085
Germany

HOME PAGE: http://www.wguth.uni-freiburg.de

Daniel Meierrieks

WZB Berlin Social Science Center ( email )

Reichpietschufer
50
Berlin, D-10785
Germany

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