APRIL 13 2017

Alan Krueger, AEI: What Makes a Terrorist. The available evidence is nearly unanimous in rejecting either material deprivation or inadequate education as important causes of support for terrorism or participation in terrorist activities. Such explanations have been embraced almost entirely on faith, not scientific evidence.I studied 311 combatants, representing 27 countries, who were captured in Iraq. Although the vast majority of insurgents are native Iraqis, motivated by domestic issues, foreigners are alleged to have been involved in several significant attacks. I looked at the characteristics of the countries insurgents came from, and, importantly, of the countries with no citizens captured in Iraq. It turned out that countries with a higher GDP per capita were actually more likely to have their citizens involved in the insurgency than were poorer countries.

Alan B. Krueger, Princeton University: What Makes a Homegrown Terrorist? Human Capital and Participation in Domestic Islamic Terrorist Groups in the U.S.A. The hodgepodge of alleged homegrown Islamic terrorists that were studied here do not appear especially deprived. They were about as likely to be idle (neither working nor enrolled in schools) as were other American Muslims, and they had slightly more education than the average American Muslim. These findings are a contrast to what is typically found in studies of participation in criminal behavior more generally.

Efraim Benmelech, Esteban F. Klor, NBER: What Explains the Flow of Foreign Fighters to ISIS? This paper provides the first systematic analysis of the link between economic, political, and social conditions and the global phenomenon of ISIS foreign fighters. We find that poor economic conditions do not drive participation in ISIS. In contrast, the number of ISIS foreign fighters is positively correlated with a country's GDP per capita and Human Development Index (HDI). In fact, many foreign fighters originate from countries with high levels of economic development, low income inequality, and highly developed political institutions. Other factors that explain the number of ISIS foreign fighters are the size of a country's Muslim population and its ethnic homogeneity. Although we cannot directly determine why people join ISIS, our results suggest that the flow of foreign fighters to ISIS is driven not by economic or political conditions but rather by ideology and the difficulty of assimilation into homogeneous Western countries.

Global Terrorism Index, Institute for Economics and Peace: Excluding the September 11 attack, only 0.5 per cent of deaths from terrorism have occurred in the West since 2000. Lone wolf attackers are the main perpetrators of terrorist activity in the West. Seventy per cent of all deaths from terrorism in the West since 2006 were by lone wolf terrorists with the rest being unknown or group attacks by more than three attackers. Islamic fundamentalism was not the main cause of terrorism in the West over the last nine years. Eighty per cent of deaths by lone wolf terrorists in the West were driven by right wing extremism, nationalism, antigovernment sentiment and political extremism and other forms of supremacy. Terrorist activity is a significant driver of refugee activity and internal displacement. The countries which are the greatest source of refugees and internally displaced people also suffer the most deaths from terrorism. Ten of the 11 countries that had more than 500 deaths from terrorism in 2014 had the highest levels of refugees and IDPs in the world.

Kenneth Rogoff, Project Syndicate: Growing Out of Populism? The threat to globalism seems to have waned in Europe, with populist candidates having lost elections in Austria, the Netherlands, and now Germany. But a populist turn in upcoming elections in either France or Italy could still tear apart the European Union, causing massive collateral damage to the rest of the world. The outlook for global growth is improving, and, with sensible policies, the next several years could be quite a bit better than the last – certainly for advanced economies, and perhaps for most others as well. But populism remains a wildcard, and only if growth picks up fast enough is it likely to be kept out of play.

Daveed Gartenstein-Ross, Foreign affairs: Lone Wolves No More. The Decline of a Myth. Over the past nine months, however, the public understanding of the strikes has demonstrably shifted. There is growing awareness that individuals labeled lone wolves are often in communication with other militants, sometimes using encrypted services. In several prominent cases, the lone attackers communicated with “virtual planners”—ISIS operatives, often based in Syria, who offer would-be terrorists all the services once provided by physical networks. Enabled by a combination of social media and the recent boom in end-to-end encryption, virtual planners scout for recruits, work to radicalize and spur them to action, provide operational guidance, and even give operatives critical technical assistance, such as advice on the construction of explosives.

Philipp Ager, Leonardo Bursztyn, Hans-Joachim Voth, NBER: Killer Incentives: Status Competition and Pilot Performance during World War II. A growing theoretical and empirical literature shows that public recognition can lead employees to exert greater effort. However, status competition is also associated with excessive expenditure on status goods, greater likelihood of bankruptcy, and more risk taking by money managers. This paper examines the effects of recognition and status competition jointly. In particular, we focus on the spillover effects of public recognition on the performance and risk taking of peers. Using newly collected data on monthly “victory” scores of more than 5,000 German pilots during World War II, we find that status competition had important effects: After the German armed forces bulletin mentioned the accomplishments of a particular fighter pilot, his former peers performed considerably better. This outperformance varied across skill groups. When a former squadron peer was mentioned, the best pilots tried harder, scored more, and died no more frequently; in contrast, average pilots won only a few additional victories but died at a significantly higher rate. Hence our results show that the overall efficiency effect of nonfinancial rewards can be ambiguous in settings where both risk and output affect aggregate performance.