Challenging the State: Evaluating the Effects of Uneven Distribution of Public Goods, Economic Globalization and Political Openness on Domestic Terrorism

The end of Cold-War ushered in an era of global economic integration and political openness in terms of emerging democracies; the world celebrated the triumph of free market capitalism as the East European ex-communist countries and Third World countries of Asia and Africa placed market forces at the center of their policy. There seems to have been a breakthrough for the idea of the Manchester School, in terms of using economics as a means of international peace. On the other hand, however, the world is not at peace. The collapse of the “Soviet Empire” was followed by the emergence, or re-emergence, of many ethno-political conflicts, religious militancy, terrorism, and severe competition over scarce resources. Domestic terrorism, as a form of intrastate violence, has varied widely along with the post-Cold War period of global economic integration and political openness, taking almost a U-shape in its fluctuations. How are these two phenomena– economic integration and emergence of democracies – related to domestic terrorism? The thesis is intended to explore whether post-Cold War trends of global economic integration and emergence of democracies are responsible for the fluctuations in domestic terrorism. A rational choice theoretic model of violent intrastate conflict that is based on three crucial factors- (1) political openness, (2) global economic integration, and (3) heterogeneity cost- is used to explain the causal relationship. I argue that resort to terrorism is a rational choice when individuals’ cost of heterogeneity - deprivation from public goods due to geographical and ideological distance -increases; opportunity is provided by democratization and integration to the global economy. The testable hypotheses regarding the influence of global economic integration, emerging democracies and heterogeneity cost on domestic terrorism derived from the theory are empirically tested on a global dataset of 172 countries for the time period between 1990 and 2007. I also use a regional dataset on South Asia and a case study on India to supplement my findings and situate them in historical context. I conclude with the policy implications of my findings and offer suggestions on how this research can be extended in the future.