Identity and Terrorism

We argue that the sense of identity is a prime motivator of terrorist activities and investigate its implications for defence against terrorism. Our framework models the decentralized terrorism (not sponsored by any state) that is characteristic of contemporary reality. Terrorist responses to perceived affronts to identity increase with the intensity of spite towards out-groups and altruism towards in-groups. We show that, while the intensity of terrorist actions is magnified by in-group altruism, it is out-group spite that is the more essential feature of identity that is pertinent to decentralized terrorism. Altruism towards in-group members, however, plays an important role in overcoming the potential free-riding of terrorists, making individual terrorist activities possible without coordination—despite the fact that such activities are of a public good nature from the terrorists’ viewpoint. We show that the cost of ignoring identity considerations of terrorists can be considerable to countries defending against terrorism. When social identity is taken into account, we show that some actions that are espoused in the literature as being optimal for a country in conflict for economic or geopolitical reasons lack credibility (in the sense of Schelling, 1960). JEL Classification Number : D74, H56