The Effect of Crime on Terrorism: A Nonlinear Dynamic Panel Data Analysis.

This article investigates the relationship between crime and terrorism using a system Generalized Method of Moments (GMM) analysis on data from 75 countries spanning 2003 to 2020. It identifies a U-shaped relationship whereby crime initially has a negative (substitutive) effect on terrorism below a critical crime threshold, but a positive (complementary) effect above that threshold, indicating that at higher crime levels, criminal and terrorist activities reinforce each other. The study also finds evidence of "terrorist inertia," meaning past terrorist incidents increase the likelihood of future attacks. Control variables such as institutional quality, economic conditions, social factors, and demographics were included, with findings suggesting that stronger rule of law and government effectiveness reduce terrorism, while income inequality and globalization increase it. These results highlight the complexity of the crime-terrorism nexus and suggest that policy responses should consider the nonlinear dynamics and persistent nature of terrorism.