Terrorism and Economic Development--Posner's Comment
I agree with Becker's analysis as far as it goes, but I question whether the amount of terrorism is highly sensitive to economic development, to which the "demographic transition"--the well-documented tendency of birth rates (also death rates) to decline sharply when a nation reaches a threshold level of economic development--contributes. When birth and death rates decline, the average age of the population rises, which is a stabilizing force, the number of young men declines, and the economic opportunities of the young are greater because there are fewer young. So the number of potential foot soldiers for terrorism is diminished, as it is by anything that raises the opportunity costs of prospective terrorist recruits. But how important are those opportunity costs to the amount of terrorism?
It is helpful to think of terrorism as of other goods and services in demand and supply terms. There is a demand for terrorism, and a supply of terrorism, and the intersection of demand and supply gives the amount of terrorism. Terrorism is a political phenomenon, and the demand is driven mainly by political grievances, real or imagined. Often the grievances are related to foreign occupation. France in Algeria; the British in Palestine; now the Israelis in the West Bank; the United States in Iraq (and earlier in the Philippines)--though in the case of Islamic terrorism, the major factor seems to be the Western "presence" in the Middle East, rather than foreign occupation; even Israel's occupation of the West Bank seems a subsidiary factor. And the Baader-Meinhoff gang in West Germany, the Red Brigades in Italy, and Aun Shirikyo in Japan are examples of terrorist groups unrelated to foreign occupation. But it is the existence of grievance that is key, and often--probably typically--the grievance is political rather than economic.
If demand for terrorism is grievance-driven, then one can expect the supply of terrorists to come mainly from the intelligentsia, for the members of the intelligentsia are more likely than ordinary people to be moved by ideas, resentments, and political ambitions rather than by material concerns. They have the leisure and the education to think big thoughts, like overthrowing a government, which rarely brings material improvements.
Nor is it the case that the intelligentsia supplies merely the leaders, who then send their simple-minded followers to destruction. The leaders are at risk themselves; more important, the perpetrators of the actual terrorist attacks tend to be middle class (though the second intifada, mentioned by Becker, may be an exception). From a labor-market standpoint, there are two important tradeoffs in recruiting a supply of terrorists: quality-quantity, and capital-labor, and they are related. Because terrorists tend to be few in number if only because of the need for concealment, and to be operating in a hostile environment, the recruitment of a large number of poorly trained and motivated cannon fodder is unlikely to be optimal; they are likely to give the game away. Moreover, the most effective terrorism requires some technical sophistication (such as piloting an airplane), and this is a further reason for terrorist leaders to recruit high-quality personnel.
The relation of economic development in general or the demographic transition in particular to terrorism is likely to be extremely indirect, and is probably small. If one looks at a list of 195 countries ranked by birth rate, see https://en.wikipedia.org/wiki/List_of_countries_by_birth_rate, one discovers that of the 25 nations with the highest birth rates, all but one (Afghanistan) are in Africa, and Africa has not proved to be a major source of terrorists relative to its vast population. Pakistan has the world‚Äôs 57th highest birth rate--27.2 per thousand. This is high--replacement is 21; the U.S. birth rate 14; Germany‚Äôs 8.2--and Pakistan is often used as an illustration of a nation that has not made the demographic transition yet. Saudi Arabia, that cradle of Islamic terrorism, has a lower birth rate--24.2--though it is still high. On the other hand, Saudi Arabia is a relatively wealthy country by international standards; its per capita income is similar to that of Poland and Chile. Algeria, with a birth rate (20.8) considerably below Saudia Arabia's, has a severe terrorism problem. Jordan has a substantially higher birth rate than Algeria (in fact it is only slightly lower than Pakistan's), but is not a hotbed of terrorism.
All this said, there is some negative correlation between birth rates and terrorism in Muslim countries, but it is weak, and probably swamped by other factors. The major factor in Islamic terrorism may have nothing directly to do with economic development or the factors that influence it; it may simply be the influence of extremist Islamic religious beliefs in particular Muslim nations and communities.