Journal Of The Econometric Society

An International Society for the Advancement of Economic
Theory in its Relation to Statistics and Mathematics

Edited by: Guido W. Imbens • Print ISSN: 0012-9682 • Online ISSN: 1468-0262

Econometrica: Jul, 2022, Volume 90, Issue 4

Terrorism Financing, Recruitment, and Attacks
p. 1711-1742

Nicola Limodio

This paper investigates the effect of terrorism financing and recruitment on attacks. I exploit a Sharia‐compliant institution in Pakistan, which induces unintended and quasi‐experimental variation in the funding of terrorist groups through their religious affiliation. The results indicate that higher terrorism financing, in a given location and period, generate more attacks in the same location and period. Financing exhibits a complementarity in producing attacks with terrorist recruitment, measured through data from Jihadist‐friendly online fora and machine learning. A higher supply of terror is responsible for the increase in attacks and is identified by studying groups with different affiliations operating in multiple cities. These findings are consistent with terrorist organizations facing financial frictions to their internal capital market.

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Supplemental Material

Supplement to "Terrorism Financing, Recruitment and Attacks"

Nicola Limodio

This zip file contains the replication files for the manuscript.

Supplement to "Terrorism Financing, Recruitment and Attacks"

Nicola Limodio

This online appendix contains material not found within the manuscript.

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