A paper analyses, from an economist’s viewpoint, why some people agree to blow themselves up for a cause.
Terrorism has gripped our attention recently, making this an obvious topic for this column. Not mainstream textbook stuff, but there is ample research as many economists have extended their tools to analyse religion, terror and counterinsurgency. Labour economists are obviously best suited for grappling with these unusual forms of employment and Eli Berman’s work, at the University of California, San Diego, is useful for India, not just in the aftermath of the Mumbai attacks but also in the context of the Naxalite movement, which as our prime minister has said, poses the greatest threat to internal security. The answer lies, not surprisingly, in more efficient provision of social services, through a combination of market, government and non-discriminatory NGOs.
In “Religion, Terrorism and Public Goods: Testing the Club Model”*, Berman and Laitin ask some basic questions: Why are religious radicals such lethal terrorists? Why would anyone choose suicide terrorism, which is very rare in civil wars? Why do suicide attackers generally target members of other religions? Interestingly, they model terrorists as rational actors — they justify this methodological move, “If we cannot explain these destructive behaviours in a model in which individuals respond to incentives, what policy solutions could we recommend that are not themselves inherently destructive?” So they blend the economic theory of clubs, the sociology of religion and the political science of insurgencies and use a dataset on international terrorist attacks from 1968 to 2006 to test various hypotheses — “religious radicals can confidently take on high value targets if they are a club which provides local public goods,” “The stronger the social service provision of the club, the more loyal will be its’ operatives, and thus the more damaging will be its’ suicide attacks” etc.
Economists are naturally puzzled by the voluntary membership of radical groups that limit choice, impose restrictions and ask for sacrifices. But Berman and Laitin demonstrate that these institutions are clubs that perform valuable social services for their members, efficiently providing public goods where markets and governments have failed. Utility and time preference analysis are used, to explain, for instance, “the common Taliban practice of years of attendance in religious seminaries which offer little or no training in marketable skills. .. a puzzling choice for impoverished Afghan refugees in Pakistan. Yet as a sacrifice of time which allows access to a desirable club, that behavior may be quite sensible.” A footnote clarifies the implicit assumption of the existence of other educational and work alternatives, which may be true only in some places.
In fact, in this paper, the footnotes add significant value: “.. subsidies to a club can induce extreme increases in sacrifice… For the Taliban, such a subsidy could come in the form of transfers from their sponsors, Pakistani intelligence and Bin Laden, or from increased revenues from controlling smuggling and the drug trade.”
They offer four policy prescriptions — remove finance options for clubs where services are restricted to members, improve public good provision, reduce smuggling and other rents and increase employment options. Familiar ideas, but the authors recommend these be targeted to “that small proportion of population for whom defection and leaks of information are relevant.” Unfortunately, this means profiling, a politically explosive issue with religious groups. Moreover, when radical groups provide valuable public goods, it is difficult to wean away public support.
But terror does not always have a religious base and the Planning Commission Report**, “Development Challenges in Extremist Affected Areas” is a must-read for all. Public goods, it reminds us, also include justice and policing; “Here lies one of the attractions of the Naxalite movement. The movement does provide protection to the weak against the powerful, and takes the security of, and justice for, the weak and the socially marginal seriously.” It concludes, “There is no denying that what goes in the name of “naxalism” is to a large extent a product of collective failure to assure to different segments of society their basic entitlements under the Constitution and other protective legislation.” There is no alternative to good governance for all sections of the society — till we get that right, the future looks bleak.
*Eli Berman and David Laitin, January 2008, http://www.nber.org/papers/w13725
**April 2008, http://planningcommission.nic.in/reports/publications/rep_dce.pdf
Sumita Kale is chief economist at Indicus Analytics
