Work

Money from Afar: Analyzing the link between remittances and terrorism

Year: 2025

Type: article

Abstract: Despite the popular rhetoric around remittances and money transfers from abroad being a convenient source of terrorism financing and the resulting imposition of an array of financial regulations on such service providers, the evidence linking remittances to terrorism is largely insufficient. The present study empirically analyzes the relationship between remittances and terrorism using global data from 1970 to 2019. In order to isolate causality, the study exploits the variation in remittances of a country induced by natural disasters in related countries - the relatedness being defined in terms of the share of migrants. The empirical evidence shows a positive relationship between remittances and terrorism that consistently emerges in various empirical specifications, with alternative outcomes variables, and while using alternative instruments, contributing to our understanding of the role of remittances in terrorism. Recentering the instrument and conducting falsification tests lends further support to the empirical findings.

Source: European Economic Review

DOI: 10.1016/j.euroecorev.2025.105184

Author: Rafat Mahmood

Institution: Australian Research Council

Language: English

Topic: Terrorism, Counterterrorism, and Political Violence

Subfield: Sociology and Political Science

Field: Social Sciences

Domain: Social Sciences

SDG: Peace, justice, and strong institutions

Open Access status: hybrid

Estimated APC paid: $3,690