The short- and long-run relationship between the illicit drug business and terrorism

ABSTRACT

We study the effect of the illicit drug business on terrorism for a sample of 58 countries for the 1984–2007 period. Consistent with the notion of a crime-terror nexus, we find that in the long run, higher drug prices are associated with more terrorism. In the short run, however, increases in drug prices lead to less terrorism, potentially because terrorist groups respond to higher drug business attractiveness by prioritizing criminal over terrorist activity.

KEYWORDS:

• Terrorism
• illicit drugs
• crime-terror nexus
• conflict

JEL CLASSIFICATION:

• D74
• F59

Acknowledgements

The authors want to thank an anonymous referee and the editorial team of Applied Economics Letters for their helpful comments.

Disclosure statement

No potential conflict of interest was reported by the authors.

Notes

¹ http://georgewbush-whitehouse.archives.gov/news/releases/2001/12/20011214-2.html.

² Adding further controls (indicating, e.g., external conflict) to our ARDL models does not affect our main results, but tends to compromise the models’ dynamic stability (results available upon request).