The Effect of Competition on Terrorist Group Operations

Outbidding

The outbidding perspective arises from the realization that dual pressures exist within all terrorist organizations. Terrorist leaders “must cope with a constant tension between their desires to preserve the organization and the membership’s desire for action” (Crenshaw 1985, 476). Groups use violence to relieve both pressures; groups will not remain relevant without the use of action and people will not join an organization that does not appear to be either active or effective. When placed against another organization, the use of violence then becomes the criteria by which groups are judged.

Early theories did not consider the environment in which the group was placed but simply posited that it was competition that affected whether outbidding occurred (Crenshaw 1985; Oots 1989). Put simply, groups facing competition from a more extreme competitor would radicalize and engage in more violence to prevent members from defecting. ¹ The adoption of terrorism by the Official Irish Republican Army (OIRA) in response to the same decision by the Provisional Irish Republican Army (PIRA) is indicative of this type of outbidding logic (Crenshaw 1985; Moloney 2010). In the Palestinian areas, this is seen with the adoption of suicide terror by secular groups after its use by fundamentalist organizations.

The defection of members provides another cause for outbidding (Crenshaw 1985). In this case, the remaining members would increase their level of activity to justify the investment they had made in joining the organization. This initial decision is not an easy one. Wolf (1978, 176) describes an existence “characterized by the lack of comfort, the absence of expendable income, and the denial of leisure activity and personal privacy.” As a result, the high personal cost endured by members makes activity their only sustenance and identity. Increased action, therefore, is a logical result of individuals seeking to ensure that their choices to engage in terrorism are justified (Kellen 1979; Crenshaw 1985).

The most recent incarnation of outbidding, provided by Bloom (2005), has its roots in the failure of the Israeli–Palestinian peace process and the subsequent increase in the use of suicide terrorism. The glorification of suicide terrorism, and the support groups received for this act, created an environment where all groups had to engage in numerous and spectacular acts of violence. ² The logic of this theory is simple and persuasive—“if multiple insurgent groups are competing for public support, bombings will intensify in scope and number as they become both the litmus test of militancy and the way to mobilize greater numbers of people within their community” (Bloom 2005, 78). Such action is known to be effective; Jerrold Post and his research team (2003, 173) found that nearly 60 percent of members in secular groups and 43 percent of religious group members admitted to joining the most active terrorist organization in their community.

This theory does differ from its predecessors. For Bloom (2005), outbidding has to occur in an environment supportive of a group’s decision to engage in extreme violence. In the case of the Israeli–Palestinian crisis, outbidding was successful because the ongoing conflict with the Israelis, the collapse of the peace process, and the ineffectiveness of the Palestinian Authority created an atmosphere of hopelessness that spurred the creation of terrorist organizations and legitimated terrorism, particularly suicide terrorism. The newfound acceptability of this tactic became the mark by which all organizations were judged, setting off the cycle of outbidding. Support for suicide terrorism increased quickly in this environment, reaching upward of 85 percent in October 2001 from lows of 24 and 33 percent during the period from 1997 to 1999 (Bloom 2005, 193).

In Sri Lanka, another of Bloom’s (2005) case studies, outbidding arose for largely the same reasons. The Tamil history with the government had been marked by political futility and violence at the hands of the majority Sinhalese. As a result, Tamil quality of life had changed little since independence. This status quo led to the acceptance of terrorism and, moreover, to the creation of a number of Tamil separatist groups, one of which was the Liberation Tigers of Tamil Eelam (LTTE). Like the Palestinian case, the resultant violence was caused by groups competing for support within an environment that accepted that type of violence.

Unlike the Palestinian case, the acceptability of terrorism began to wane in Sri Lanka. The LTTE had used violence to great effect—it struck at the Sinhalese, moderate Tamils, and competitor organizations to become the predominant organization pressing for Tamil separatism. By 2001, the long-running conflict between it and the government had sapped the will of the organization’s supporters, driving it to the negotiating table. By the time of Bloom’s analysis, Tamil hopefulness for peace and the end of competition between the various Tamil organizations had reduced the frequency and appeal of suicide terrorism.

This perspective has led to some quantitative work—most notably that of Chenoweth (2010). In this work, she argues that intergroup competition explains why democracies experience more terrorist activity than nondemocracies. She finds support that transnational terrorist incidents and domestic terrorist organizations are more likely to originate in competitive polities. While her analysis does provide some validation of Bloom (2005), it is not a test of terrorist competition per se. Instead, competition between terrorist organizations is subsumed into a larger measure of political competition. States may, in fact, have high levels of terrorist competition while having little political competition. Competition is also assumed to occur across the terrorist group system. The assumption is that resources and recruits are simply drawn to the most active group. I discuss the potential drawbacks to this approach, particularly in the context of the organizational ecology literature, in the Methods section.

Competition and Moderation

While Bloom’s (2005) theory provides an excellent explanation of terrorist competition and its outcomes in areas that include both a favorable government policy and a society acceptant of violence, it is important to consider what the effect of competition may be when either of those two conditions is absent. In such situations, competition may exacerbate collective action problems. Groups may have goals that they strive for, but the lack of a supportive environment may mean that groups are content to free ride on the effort of other groups and are unwilling to expend additional resources to distinguish themselves from their competitors. As such, competition may lead to less, rather than increasingly, violence.

Terrorist organizations, at their most fundamental level, seek to attain some sort of political, religious, or social objective. This can involve the creation of a new government or state, the institution of a new social contract based on a political or religious philosophy, or the creation of new public policy (Kydd and Walter 2006). In these disparate cases, the outcomes all share the characteristics of classic public goods: that is, they are both nonrival and nonexcludable (McAllister and Schmid 2011). The presence of additional groups makes the attainment of such goals more possible, but reduces the discernible impact of any individual contribution and increases the likelihood that any one group will shirk. This presents a central dilemma to those seeking policy change—when individuals and organizations can receive the benefits of action regardless of their participation—then no incentive exists to contribute to its attainment. These problems vex institutions and individuals in both benign and violent political interactions (Olson 1965; Lichbach 1995)

The possibility of free-riding also means that the effort necessary to achieve the goal is likely to be underprovided (Samuelson 1954). Lichbach (1995, 18–19) notes that “protests lack protestors, rebellions lack rebels, and revolutions lack revolutionaries” and further, that while “joint operations by several dissident groups may often appear to be appropriate . . . most protest incidents are the work of a single group of dissidents.” For terrorist organizations, the presence of ideologically similar organizations theoretically increases the likelihood that an outcome will be achieved while increasing the temptation that each organization can do less, or nothing at all, to achieve the result. Merlo (2006, 106) discusses this occurring with both right and left-wing terrorism in Italy, “the division into so many groups prevented them from operating efficiently and carrying out the ‘long-term war’, which they often proclaimed in their propaganda.” ³

The problem of free-riding is exacerbated when the environment is unfavorable for outbidding—where government policy and the acceptability of violence do not justify increasing levels of violence. When government policy is moderate, either by avoiding indiscriminate violence in counterterror operations or by acquiescing to some of the terrorists’ goals, terrorist organizations are more likely to free ride. Individuals have little reason to join, and groups have little reason to act, when the perceived injustices are slight or when the desired outcome appears likely to occur. It is when government policy becomes violent—particularly when government attacks are indiscriminate—that the benefits to free-riding decrease, driving groups to action (Kalyvas and Kocher 2007). Pointing out and provoking harsh government action is a well-used recruitment tactic for both rebel groups and terrorist organizations (Lichbach 1995; Bueno de Mesquita 2005; Kydd and Walter 2006)

The logic of free-riding also holds when terrorism is perceived poorly. For Cronin (2009, 15), the absence of a viable rationalization for terrorism makes it “nothing more than murder” and a liability that “redounds against a group or its cause.” The benefits for free-riding are high in these cases; the organizations that do conduct operations will draw condemnation or, an active backlash from the public (Ross and Gurr 1989). The November 1997 attack by al-Gama’a al-Islamiyaa (GAI) in the Egyptian city of Luxor provides a vivid example. In trying to distinguish itself amongst other Islamist groups, the GAI attacked a group of tourists, killing fifty-eight foreigners and four Egyptians. The attacks, rather than galvanizing opposition against the government, widened the split between moderates and hard-line antigovernment organizations (Cronin 2009). The resulting reaction destroyed the group’s credibility, dried up their popular support, and even halted the operations of Egypt’s other Islamist groups (Wright 2006).

The Differential Effects of Ideology on Terrorist Competition

Both of the above perspectives note the highly contextual nature that accompanies competition. In each, the presence of other groups results in either outbidding or moderation dependent upon government policy and societal acceptance of violence. These conditions are largely subjective; groups may interpret and frame the government’s actions to be extreme and society to be acceptant of violence when reality might dictate otherwise. These perceptual lenses are largely the function of a group’s ideology. Drake (1998, 55) argues that ideology is crucial in understanding a group’s target selection and, moreover, “provides a motive and a framework for action.”

One of the primary ideological distinctions is that between secular and religious terrorist organizations. Juergensmeyer (2003) notes the defining characteristic of religious terrorism is that the combatants feel they are taking part in a conflict between good and evil. In such a struggle, the “absolutism . . . makes compromise unlikely, and those who suggest a negotiated settlement are as excoriated as the enemy” (Juergensmeyer 2003, 157). As such, religious terrorist organizations may be “less constrained by the desire to ‘win the hearts and minds’ of an audience” and are more likely to select extreme acts of violence (Piazza 2009, 64). This distinction may mean that, when confronted with competition, religious terrorist organizations are more likely to respond with outbidding than secular organizations.

This is contrasted with secular terrorist organizations. The political goals of these groups and the public support needed to achieve them should reduce the possibility that these groups will use outbidding. Nationalist groups, because they rely on generating popular support for their goals, should be less likely to use outbidding because extreme violence may alienate supporters and make their goals more difficult to attain (Sanchez-Cuenca and de la Calle 2009). Groups on the political left also will not use outbidding because terrorism is typically seen as a tool used to educate and mobilize supporters against the system (Laqueur 1977; Drake 1998). Finally, right-wing organizations may be inclined to engage in outbidding. This occurs because, in many instances, these groups operate with the support of the government (Della Porta 1992; Sprinzak 1995; Drake 1998; Kydd and Walter 2006). This support, independent of the population, may make them less sensitive to the potential backlash that outbidding may cause.

However, this categorization is complicated by the malleability of terrorist ideology (Abrahms 2008). In other words, political organizations can justify outbidding because the distinction between ideologically innocent and guilty is subject to interpretation rather than an unchanging absolute. The Red Brigades justified their actions, including some against supportive elements, on the basis of a cobbled-together concept of “revolutionary justice” (Manconi 1991). Abrahms (2008) notes that right-wing groups in Germany adopted the rhetoric and targeting patterns of the left to such an extent that police mistakenly suspected the actions to be that of the Communists. This flexibility thus makes cataloging secular organizations on their willingness to outbid their ideological counterparts difficult.

Nevertheless, the explanations discussed above allow us to forward two hypotheses. The first assesses the outbidding and moderation explanations for competition’s effects on terrorist organizations. The second assesses the differential effects that ideology may have on terrorist competition. They are as follows:

Hypothesis 1: Groups in competitive and favorable environments will commit more terrorist acts than groups in noncompetitive and nonfavorable environments.

Hypothesis 2: Religious and Right-Wing groups will commit more terrorist acts in competitive and favorable environments than Nationalist and Left-Wing groups.

Dependent Variable

The dependent variable used in this analysis is a yearly count of the number of domestic terror attacks committed by each individual terrorist organization. Attacks are included in the data set if they are intentional, involve a use of violence or a threatened use of violence, and the actors are subnational (START 2009, 4–5). Attacks must also fulfill two of three additional criteria for inclusion: the act must be directed toward a political, economic, religious, or social goal; there must be evidence of an intent to coerce; and the action must be outside of the realm of legitimate military activities (START 2009, 4–5). Finally, to reduce bias that may result from overemphasizing capable organizations, I follow Maoz (2007) and include failed acts of terrorism.

Independent Variable

To assess the effects of group competition, I use the inverse of the Herfindahl-Hirschman Index (HHI) as my main independent variable (Herfindahl 1950; Hirschman 1945). The HHI was originally conceived as a way to assess the concentration of firms in a marketplace. Used in this capacity, it has become a central component in economic analyses-- both the Justice Department and the Federal Reserve use it to evaluate the market impact of potential mergers (Hannan 1997; Rhodes 1993).

One of the advantages of this measure, as opposed to other means of determining competition, is that it provides a measure that is invariant to the number of competitors. For example, there may be several firms in a market that create a particular good, yet the market share of one may create an environment where little competition actually exists. Similarly, the presence of several terrorist groups may not indicate a truly competitive environment, especially if one is clearly more capable and more noteworthy than the rest. The ability of the HHI to account for this potential asymmetry is widely touted as one of the strengths of the measure (Calkins 1983).

For this analysis, the HHI is calculated as:

1 ∑ i = 1 N S i 2 ,

where  S_i is the market share of firm i, and N is the number of firms in the market.

To determine the number of firms in the market, I adopt the concept of “competitive exclusion” from the organizational ecology literature (Lowery and Gray 1995). This states that competition is a function of the resources that one draws from: groups will only compete with other groups that draw on the same resource (Lowery and Gray 1995). For them, this means competition among interest groups occurs within similar advocacy markets. Farm advocacy groups are distinct from business groups and, as such, are only likely to face competition from other farm groups. As a result, their analysis focuses on “species-guilds”—“sets of organizations representing related interests” (1995, 9).

I conceptualize the same for terrorist organizations: each state has a certain number of ideological “markets” in which recruits and resources are sought and competition is bounded. Communist terrorist organization should face competition from groups with similar ideological goals, not dissimilar ones. Secessionists have their needs best served from a nationalist, rather than a religious, organization. Post, Sprinzak, and Denny (2003, 173) note terrorist recruitment occurring within these lines: “individuals from strictly religious Islamic backgrounds were more likely to join Islamist groups, while those who did not have a religious background might join either a secular or religious group.”

Using this insight, I use the RAND Corporation’s End of Terror data set (Jones and Libicki 2008) to classify each state as having four potential ideological “markets”—nationalist, religious, left-wing, or right-wing. To determine the number of “firms” in each of these “markets,” I sum for each state-year the number of other groups that exist within each of the four ideological categories. Market share is then determined by the percentage of attacks committed per state-year by each group within each market. This best corresponds to the insight that members stay in and recruits join the most active organizations (Crenshaw 1985; Oots 1989; Post, Sprinzak, and Denny 2003). ⁸

These two values, groups per ideology and the number of attacks per group, are used to calculate the HHI for each ideological category for every state-year. The use of the inverse of the HHI follows Taagepara and Shugart (1989) and allows for a more readily interpretable variable—scores near 1 indicate a condition of monopoly while higher scores indicate competitive environments. ⁹ If the outbidding argument is correct, high values of this variable will be associated with more total attacks. If the moderation perspective is correct, low values will be associated with more attacks.

Figure 1 plots the average level of organizational competition for the ten states with the highest number of domestic terrorist attacks. ¹⁰ Bars of one unit length indicate a condition of monopoly while longer bars indicate progressively more competitive environments. The shadings indicate terrorist ideology as determined by the RAND End of Terror data set (Jones and Libicki 2008).

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Figure 1.

Average Level of Competition for Top Ten Target States of Domestic Terrorism (1970–1997)

Three states—Colombia, France, and the United Kingdom—stand out in Figure 1 as particularly competitive venues for terrorist organizations. The high score for left-wing groups in Colombia indicates an environment that gave rise to such organizations as the Revolutionary Armed Forces of Colombia (FARC), the National Liberation Army (ELN), and smaller groups like the Guevarista Revolutionary Army and the Popular Liberation Army. In France and the United Kingdom, the high level of competition occurs due to groups engaged in Basque, Corsican, and Northern Ireland separatism. For the remaining states, it is interesting to note that monopoly is the rule rather than the exception. This finding—excepting Colombia, France, and the United Kingdom—stands in contrast with Bloom’s (2005) outbidding theory.

Competition is also found to vary across regime types. ¹¹ I use the Polity2 measure from the Polity IV data set to code states as democratic or autocratic; states with scores at 6 and above are coded as democratic and those below 6 are coded as autocratic (Marshall, Gurr, and Jaggers 2009). ¹² The results indicate that democracies have higher levels of competition than autocracies (t = −9.51, p < .01). A trichotomous classification using anocracies—regimes with Polity2 scores ranging between −5 and 5—also finds that democracies are the most competitive venues for terrorist organizations (F = 52.60, p < .01). ¹³

While the underrepresentation of terrorist groups in autocracies is a problem for analysis (see Drakos and Gofas 2006), the difference in the number of groups between the regime types provides support for Eubank and Weinberg’s (1994, 1998) findings that democracies are more likely to harbor terrorist groups than autocracies. Further, this echoes Chenoweth’s (2010) research linking the emergence of terrorist organizations in democracies to high levels of intergroup competition.

Because outbidding theory is contextual—depending on the “domestic politics of the minority group and the state counter-terror strategies and responses to insurgent violence” (Bloom 2005, 79)—I include a variable assessing the “environment” that each state provides a terrorist organization. This variable is drawn from Mullins and Young (2012), who argue that states and societies that legitimize and rationalize the use of violence may be more likely to be a victim of terrorism. This occurs as a result of a spillover process—groups model and adopt the state’s use of violence to its own interactions.

This measure is drawn from four distinct indicators—two that capture state violence against its people, a third that measures citizen violence, and a final measure of state involvement in war. The first measures whether or not a state has used capital punishment in a given year while the second captures the state’s use of extrajudicial killings through the Political Terror Scale (Gibney and Dalton 1996). The third component assesses citizen violence using the number of homicides per 100,000 as drawn from the World Health Organization. The final element measures state participation in an interstate or intrastate war as measured by the Correlates of War project (Sarkees and Wayman 2010). These components were found to load on a single factor. This factor, called the acceptability of violence, is used to conduct the analyses. The temporal range of this variable reduces the subsequent analyses to the 1970 to 1997 time period.

To best assess this relationship, I create an interaction term between competition score and this variable. If outbidding is correct, I expect a positive relationship between the interaction term and the dependent variable. This would indicate, like Bloom (2005), that competition and societal tolerance for violence increase the incidence of group violence. To best assess these, I follow Brambor, Clark, and Golder’s (2006) suggestion to visually analyze interaction terms. I do this using Boehmke’s (2006) Grinter data utility. ¹⁴

Control Variables

I consider a number of control variables that may have an impact on group activity. I first consider the state’s ability to exert control over its population and territory. A weak central authority creates gaps in state control that allows groups to divert resources from organizational security to the conduct of international terror (Takeyh and Gvosdev 2002; Lai 2007). For domestic terrorist organizations, a weak central government should allow groups to operate without fear of state repression and to dedicate more of their resources to attacks within the state.

I assess state control using a measure of a state’s relative political capacity (RPC) (Arbetman and Johnson 2008). This variable was originally used by Organski and Kugler (1980) to measure the ability of states to wage war independent of the absolute size of their resource base. At the domestic level, similar measures of resource extraction have been associated with a decrease in internal violence (Benson and Kugler 1998). This variable is roughly calculated as the ratio of the total value of actual state extractions relative to the potential value of all state extractions (Arbetman and Johnson 2008). ¹⁵ I anticipate that increased state control will be associated with fewer attacks.

A second control variable is the state’s regime type. The impact of regime type has been thoroughly debated in previous research, resulting in three schools of thought. The first argues that the liberal characteristics of democracies, such as respect for civil liberties, freedom of the press, and rights of due process reduce operational costs for terrorist groups, allowing them to recruit new members, and to plan attacks with minimal interference from the government (Crenshaw 1981; Hamilton and Hamilton 1983; Schmid 1992). A second argues that democracies face reduced risks from terrorism because there are many ways, such as voting, demonstrations, or the formation of political parties to effect change without the need for violence (Eubank and Weinberg 1994; Eyerman 1998). Finally, the third argues that the components of democracy have differential effects on terrorism; characteristics like political efficacy and electoral participation help reduce terrorism while constraints of executive power increase the probability of terrorism (Li 2005). For this, I again use the Polity2 variable (Marshall, Gurr, and Jaggers 2009). ¹⁶ I divide this score into three categories—democracy, autocracy, and anocracy—and exclude autocracy as the baseline category.

I also use a number of additional control variables. Civil war should have a positive effect on the number of domestic terror attacks. Governments engaged in civil wars should be less able to maintain control over their territory, reducing their ability to combat terrorism, and allowing groups to devote more resources toward terrorist violence. Civil war can also sway unaligned moderates to support terrorist organizations, thus increasing their vitality and longevity (Kalyvas 2004). Data for this comes from the UCDP/PRIO Armed Conflict Dataset (Gleditsch et al. 2001). ¹⁷

Larger populations are also likely to have an effect on terrorist group operations. Large populations provide organizations with a larger base to recruit from, a broader pool of resources, and a more difficult environment for a state to monitor. All of these characteristics should contribute to more active organizations. The values for the population variable are taken from Gleditsch (2002). This variable is logged to reflect the decreasing benefit to terrorist groups given larger populations.

Finally, I account for economic development. While economic discontent has been linked to a variety of political outcomes, research on the role of economics on terrorism has found little support for a direct effect (Krueger and Maleckova 2003; Abadie 2006; Piazza 2006). Rather, support and recruitment for terrorism seem to occur more often among the educated and employed than the poor (Krueger and Maleckova 2003). At the same time, wealthier states that are able to provide adequate social welfare policies are less likely to have popular support for terrorism and to experience terrorism on their soil (Burgoon 2006). This is unclear at the level of the group; organizations in low-wealth countries may produce less terrorism because it is difficult to assemble enough recruits who meet a group’s qualifications. At the same time however, the production of terrorism at the highest levels of state wealth may be low as qualified recruits exist but support for terrorism is low. Data for this variable come from Gleditsch (2002).

Because the hypotheses relate to terrorist group activity, as measured by number of attacks, I use an event count model. Poisson models are not appropriate in this case as they assume that the data are independent and homogenous. Instead, it is likely that group activity not independent as organizations that have gained experience with violence are more likely to use it in the future (Jackson et al. 2005). Thus, given that the number of total attacks is both dependent and overdispersed, I employ a negative binomial model (Long 1997; Cameron and Trivedi 1998). I lagged the independent variables to account for endogeneity. Finally, I also include robust standard errors clustered by group to address any potential problems with heteroscedasticity and serial correlation (Greene 2002). Table 1 provides the descriptive statistics for the variables used in this analysis.

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Table 1.

Descriptive Statistics

Variables	Observations	Mean	Standard Deviation	Min	Max
Domestic terrorist attacks	3,786	7.29	32.94	0	509
Competition	3,586	1.74	1.13	1	9
Acceptability of violence	3,384	.575	1.09	−1.12	3.18
Competition × Acceptability	3,384	1.12	2.41	−5.22	14.71
Anocracy	3,468	.199	.399	0	1
Democracy	3,468	.568	.495	0	1
GDP per capita	3,523	5199.75	5479.51	136.76	28484.4
RPC	3,456	1.00	.527	.020	3.52
Civil war	3,586	.514	.500	0	1
Logged total population	3,523	10.32	1.58	5.97	13.75

Note. GDP = gross domestic product; RPC = relative political capacity.