Economic and Political Determinants of Terrorism in Selected European Countries

Abstract

In this paper, we aim to assess the connection between terrorist attacks and socioeconomic and political indicators through an empirical study of selected 16 European countries. In order to reduce the dimension of the problem, factor analysis is applied in order to transform the indicator variables into factors. The countries are classified into clusters based on similarity of their economic and political indicator development, using loadings of the indicators onto the factors. For countries in each cluster, the connection of their political and socioeconomic indicators with terrorist attacks is then studied via correlation analysis of the attacks and the aforementioned factors. We propose two hypotheses – the hypothesis of opportunity costs, and the hypothesis of economic deprivation. For countries in each cluster, the hypotheses are examined with the use of correlation analysis. The results indicate that economic development affects the frequency of terrorist attacks in Belgium, France, Italy, the Netherlands, Luxembourg, Portugal, Spain, the United Kingdom, Ireland, and Switzerland.