Professor Alan B Krueger Princeton University

Defining and Measuring Terrorism: macro-econometric evidence

Lionel Robbins Memorial Lectures

Christopher Johnson Chair

Outline of Lectures

1. Micro Evidence

2. Macro Evidence

3. Consequences

Lionel Robbins Memorial Lectures

International Terrorism:

Causes and Consequences

Alan B. Krueger

Outline

• U.S.’s International Terrorism Data

• Gov’t Bungling of Data

• Analysis of (Imperfect) Data

• Foreign Insurgents in Iraq

• Conclusions

References: “Education, Poverty and Terrorism: Is There a Causal Connection?” Journal of Economic Perspectives, with Jitka Malečková, Fall 2003.

“Kto-Kogo?: A Cross-Country Study of the Origins and Targets of Terrorism,” with David Laitin.

“Misunderestimating Terrorism: The State Department’s Big Mistake,” Foreign Affairs, with David Laitin, October 2004.

Papers on www.krueger.princeton.educ

The term ‘terrorism’ means premeditated, politically motivated

violence perpetrated against noncombatant targets by

subnational groups or clandestine agents, usually intended to

influence an audience.

The term ‘international terrorism’ means terrorism involving

citizens or the territory of more than one country.

… the term noncombatant is interpreted to include, in addition to civilians,

military personnel who at the time of the incident are unarmed and/or not

on duty. … We also consider as acts of terrorism attacks on military

installations or on armed military personnel when a state of military

hostilities does not exist at the site, such as bombings against U.S. bases in

the Persian Gulf, Europe, or elsewhere.

U.S. State Department Definition

Released

April 29, 2004

?

Are we winning the war on

terrorism?

Although keeping score is difficult,

the State Department's annual

report on international terrorism,

released last month, provides the

best government data to answer this

question. The short answer is "No,"

but that's not the spin the

administration is putting on it.

"You will find in these pages clear

evidence that we are prevailing in

the fight," said Deputy Secretary of

State Richard Armitage. As

evidence, the "Patterns of Global

Terrorism" report says that

worldwide terrorism dropped by 45

percent between 2001 and 2003.

The report claims that the number

of terrorist acts committed last year

"represents the lowest annual total

of international terrorist attacks

since 1969."

Yet, a careful review of the report

and underlying data supports the

opposite conclusion: The number

of significant terrorist acts

increased from 124 in 2001 to 169

in 2003 -- 36 percent -- even using

the State Department's official

standards. The data that the report

highlights are ill-defined and

subject to manipulation -- and give

disproportionate weight to the least

important terrorist acts. The only

verifiable information in the annual

reports indicates that the number of

terrorist events has risen each year

since 2001, and in 2003 reached its

highest level in more than 20 years.

To be sure, counting terrorist acts is

not as straightforward as counting

the number of SARS victims.

Specialists have not agreed to any

test that would unambiguously

qualify an act as one of

international terrorism. But in the

words of the Congressional

Research Service, the State

Department's annual report is "the

most authoritative unclassified U.S.

government document that assesses

terrorist attacks."

So how did the report conclude that

international terrorism is declining?

It accomplishes this sleight of hand

by combining significant and

nonsignificant acts of terrorism.

Significant acts are clearly defined

and each event is listed in an

Faulty Terror Report Card May 17, 2004

Alan B. Krueger and David Laitin

June 13, 2004

Powell interview

June 10, 2004 Spokesman

admits mistakes

__________________

● Consistent & clear

definition

● Verifiable

● Better vetting

● Career professionals first

release

● Create a statistical agency

Inspector General Report

Goodbye Appendix A

“Misunderestimating” Terrorism

Alan Krueger & David Laitin

Cross-Country Analysis

• State Department (Corrected) List

of significant terrorist events

• 1997-2003

• Negative Binomial Models

Log GDP per capita

Freedom Index

Religion

Log Population

• 149 x 149 Countries Rich data

Coded up the “Significant

Incidents” from 1997-2003

• 956 events in all

• Collected: place where

occurred; country of origin

of perpetrators; target of

attack; group responsible

or suspected; description

• Plus additional data just

on suicide attacks, incl.

domestic

Data Description

Some Issues

• Embassy (Place: country

where occurred; target:

country that owned

embassy)

• 280 events from India

(Kashmir); 104 from

Colombia; 50 in Israel

• Inconsistency: Chechnya;

multiple or single attacks

Correlations with Todd Sandler’s

Place-Based ITERATE Data

Primary

Origin Place Target

All Countries .57 .52 .23

Excl. India .89 .90 .41

No. Countries 138 139 136

17.5% more events in ITERATE data.

Country Events Events/Mil

Azerbaijan 1 0.13

Belgium 1 0.10

Eritrea 1 0.26

Germany 1 0.01

Guinea 1 0.14

Kenya 1 0.03

Nicaragua 1 0.21

Senegal 1 0.11

Thailand 1 0.02

Tunisia 1 0.11

United Arab E. 1 0.37

Zambia 1 0.10

Bahrain 2 3.11

Bangladesh 2 0.02

Chad 2 0.27

Cuba 2 0.18

El Salvador 2 0.33

Liberia 2 0.68

Macedonia 2 0.99

Morocco 2 0.07

Myanmar 2 0.04

Tanzania 2 0.06

Uzbekistan 2 0.08

Chile 3 0.20

Drc 3 0.06

Egypt 3 0.05

France 3 0.05

Kuwait 3 1.61

Peru 3 0.12

Venezuela 3 0.13

Bosnia 4 1.06

Cambodia 4 0.35

Israel 4 0.67

South Africa 4 0.10

Sudan 4 0.13

U.K. 4 0.07

Ecuador 5 0.41

Iran 5 0.08

Jordan 6 1.31

Lebanon 6 1.43

Ethiopia 7 0.11

Italy 7 0.12

Rwanda 7 0.86

Spain 7 0.18

Sri Lanka 7 0.37

Somalia 8 0.98

Yugoslavia 8 0.75

Georgia 9 1.65

Burundi 10 1.53

Uganda 10 0.48

Tajikistan 11 1.80

Indonesia 13 0.06

Algeria 14 0.47

Russia 15 0.10

Greece 16 1.52

Saudi Arabia 17 0.86

Afghanistan 18 0.72

Philippines 20 0.27

Sierra Leone 21 4.35

Iraq 26 1.17

Nigeria 26 0.21

Pakistan 26 0.20

Turkey 32 0.50

Angola 41 3.31

West Bank & Gaza 46 16.84

Yemen 49 2.95

Colombia 104 2.55

India 280 0.29

Country of Origin, No. of Events and Events per Million People

World Total: 0.16 per million people

Place, Target and Origin are Not the

Same

• P(Place=Origin) = 0.88

• P(Target = Origin) = 0.47

• P(Place = Target) = 0.53

• P(Place = Target = Origin) = 0.45

Note: Target is country most affected.

Some Initial Findings: Int’l Terrorism

• 67% of terrorist events had organizations involved

• 91% of events were carried out by multiple perpetrators.

• Religious difference in 62% of events; not very different than random people meeting

• Religious difference between perpetrator and target more prevalent for suicide attacks

• 3.5% of attacks

were on Embassies

• 12% of attacks

targeted the U.S.

• 7% of attacks were

on international

organizations

• 4.6% of attacks

were suicide

bombings

E(yij | x) = exp(x'ijβ1 +x'iβ2 + x'jβ3)

yij= Number of terrorist incidents from

country i to country j

x = Explanatory variables (e.g., income)

i = country of origin

j = target country

Estimation: Negative Binomial Model

Sample

• Drop Israel/West Bank & Gaza

• Assign Pakistan as perpetrator of Kashmir attacks

• Drop diagonal (attacks from country i on country i)

• Country must have at least 1 million people

• 149 Countries

[(149x149)-149]/2 = 11,026 pairs of countries

Main Findings for 11,026 Pairs of

Countries: Handout

1. Income of Target Matters (+) but not of Origin

2. Origin’s Civil Liberties (-); Target’s (+)

3. Lagged GDP growth (’90-’96) has no effect

4. Population of Target & Origin (+)

5. Volume of trade (-)

6. Geographic distance (-)

7. Literacy rate has no effect

8. Religion of Origin Country (Pct. Muslim and

Christian not different)

9. Occupier (+); Occupied (+)

0

1

2

3

4

5

6

Poorest 2 3 Richest

Income Quartile of Origin

Q1

Q2

Q3

Q4

Adjusted Number of Terrorist Incidents by

Income Quartile of Origin and Target

Notes: Negative Binomial regression adjusted for population, civil liberties and distance

between countries. Normalized relative to lowest income quartile.

Target:

Countries of

Origin

Richest

Poorest

0

1

2

3

4

5

6

Poorest 2 3 Richest

Income Quartile of Origin

Q1

Q2

Q3

Q4

Adjusted Number of Terrorist Incidents by

Income Quartile of Origin and Target

Notes: Negative Binomial regression adjusted for population, civil liberties and distance

between countries. Normalized relative to lowest income quartile.

Target:

0

0.2

0.4

0.6

0.8

1

1.2

1.4

Low Medium High

Civil Rights of Origin Country

Low

Medium

High

Adjusted Number of Terrorist Incidents

by Civil Liberties of Origin and Target

Target:

Notes: Negative Binomial regression adjusted for population, income, and distance

between countries. Normalized relative to lowest civil liberties countries.

Main Findings for 11,026 Pairs of

Countries

1. Income of Target Matters (+) but not of Origin

2. Origin’s Civil Liberties (-); Target’s (+)

3. Lagged GDP growth (’90-’96) has no effect

4. Population of Target & Origin (+)

5. Volume of trade (-)

6. Geographic distance (-)

7. Literacy rate has no effect

8. Religion of Origin Country (Pct. Muslim and

Christian not different)

9. Occupier (+); Occupied (+)

Others Find Similar Results

James Piazza (2004)

-- State Dept. Data on Incidents and Casualties

-- No effect of poverty, unemployment or economic growth

Alberto Abadie (2004)

-- Insurance Risk Rating Data of Domestic

and International Terrorism

-- “[T]errorist risk is not significantly higher for poorer countries, once the effects … of political freedom are taken into account.”

-- Nonlinear effect of political freedom (robust?)

Different from Civil War.

Diyala

Kirkuk

Tikrit

Bayji

IRAN Samarra

Hit

Balad Baqubah

Kuwait City

KUWAIT

Al Kut

Ar’ar

Umm Qasr

Diwaniyah

Al Hillah

Najaf/Kufah

Sulaymaniyah

An Nukhayb

Nasiriyah Qurnah

Basrah

Al Amarah

Samawah

SYRIA

Dahuk

Karbala

Tal Afar

Habur Gate

Ramadi

Ar Rutbah

Husaybah

Baghdad

Al Asad

Al Walid

SAUDI ARABIA

Fallujah

TURKEY

Irbil Mosul

COMBINED CF/ISF AND

INDEPENDENT ISF OPERATIONS 18 OCT 05

LEGEND

COMB CF & ISF OP

INDEPENDENT ISF OP

35 OPERATIONS

10 ISF Independent

25 ISF/CF Combined

8 in Baghdad

4 ISF Independent

4 ISF/CF Combined

Captured Foreign Nationals

55 56 57

73

26 26

18

0

10

20

30

40

50

60

70

80

APR MAY JUN JUL AUG SEP OCT

Since Apr ’05: 311

For the Year: 376

EGYPT: 06 JORDAN: 04 SYRIA: 03 SUDAN: 03

EGYPT: 78 SYRIA: 66

SUDAN: 41 SAUDI: 32

JORDAN: 17 IRAN: 13

PALESTINE: 12 TUNISIA: 10

ALGERIA: 08 LIBIYA: 07

TURKEY: 06 LEBANON: 03

BRITAIN: 02 QATAR: 02

UAE: 02 INDIA: 02

DENMARK: 01 FRANCE: 01

MACEDONIA: 01 MOROCCO: 01

SOMALIA: 01 YEMEN: 01 ISRAEL: 01

INDONESIA: 01 IRELAND: 01

KUWAIT:01 USA: 01

TOTAL: 311

TOTALs BY NATION

EGYPT: 78 SYRIA: 66

SUDAN: 41 SAUDI: 32

JORDAN: 17 IRAN: 13

PALESTINE: 12 TUNISIA: 10

ALGERIA: 08 LIBIYA: 07

TURKEY: 06 LEBANON: 03

BRITAIN: 02 QATAR: 02

UAE: 02 INDIA: 02

DENMARK: 01 FRANCE: 01

MACEDONIA: 01 MOROCCO: 01

SOMALIA: 01 YEMEN: 01 ISRAEL: 01

INDONESIA: 01 IRELAND: 01

KUWAIT:01 USA: 01

TOTAL: 311

TOTALS BY NATION Captured

SUDAN: 16 SAUDI: 11 EGYPT: 09 IRAN: 05

Primarily

from SYRIA:17 EGYPT: 10 SUDAN: 05 SAUDI: 05

Primarily

from

SYRIA: 17 EGYPT: 12 JORDAN: 07 SAUDI: 07

Primarily

from

EGYPT: 36 SYRIA: 10 SUDAN: 04 SAUDI: 04

Primarily

from

SUDAN: 06 SYRIA: 05 EGYPT: 04 TURKEY: 02

Primarily

from Primarily

from

SYRIA: 09 SUDAN: 03 PALESTINE: 02 LEBANON: 02

Primarily

from

New Results: Iraq Foreign Fighters

• “They’re identified in terms of questions we asked them, interrogations we do, papers that they might have on them. But with authority, we can say they came from those countries.” Maj. Gen. Rick Lynch

• Source: MNF-I & MNC-I reports (N=311)

• April 2005 – October 2005

• Sample: 81 countries in Middle East, North Africa, Europe (26 countries had captured foreign nationals)

• Also tried limiting to 47 countries within 3,000 Km. of Baghdad

“We believe that a major piece -- not numerically but in terms of the effects of their attacks -- of the insurgency is terrorists and foreign fighters. We believe that they're coming -- a majority of them come from Syria through the Euphrates River valley into Iraq. Since April of this year, we have captured 311.” - Maj. General Rick Lynch

Explanatory Variable (1) (2)

Ln Population 0.80

(0.27)

0.78

(0.24)

Ln Distance -1.83

(0.52)

-1.29

(0.50)

Ln GDP per capita -0.15

(0.36)

1.14

(0.48)

Literacy Rate (%) --- -0.024

(0.028)

Civil Liberties --- -0.45

(0.21)

Coalition Member --- -0.40

(1.01)

Muslim (%) --- 0.023

(0.011)

N=76

Negative Binomial Estimates for Foreign Fighters

Summary Iraq Foreign Insurgent

Analysis

Origin Country Characteristics:

1. Population (+)

2. Distance to Baghdad (-)

3. GDP per capita (+)

4. Literacy is insignificant

5. Gini coeff. insig.

6. Infant Mortality (-) [knocks out income]

7. Civil Liberties (-)

8. Political rights span space as Civil Liberties

9. Coalition Member has insig. effect

10. Percent Muslim of Origin Country (+)

[A] lack of civil liberties seems to be a main cause of terrorism around the

world. Support for civil liberties should be part of the arsenal in the war

against terrorism, both at home and abroad. -- Alan Krueger,

The New York Times May 29, 2003

“The more people live under democracy, with human liberty intact, the less

inclined they or their states will be to indulge terrorism or to engage in it.

This may be open to debate – though personally I agree with it – but it

emphatically puts defeating the causes of terrorism alongside defeating the

terrorists.” -- Tony Blair, Jan. 27, 2005

Destroying Civil Liberties to Build Democracy?

• Guantanamo Bay

• Abu Ghraib

• Paul Bremer closes Al-Hawza newspaper March 28, 2004

• Lincoln Group – plants stories in Iraqi newspapers

• “Data-free” war on terrorism

• Caveat: Lack of correlation is not proof of lack of causality

• Civil liberties seem to matter

• Indirect Links to Economic Conditions: Civil war? Political freedoms?

• Terrorism should be viewed as a violent political act, not a response to economic conditions

• Many reasons to improve education and reduce poverty, but reducing terrorism probably not one of them.

Conclusion