analysis helps explain some observed behavioral patterns such as the common
requirement among European terrorist groups that new members commit a violent act
as part of the recruiting process. Berman and Laitin (2003) examine why radical
religious groups are particularly well suited to using the tactic of suicide attacks.
Bueno de Mesquita (2005c) formalizes Crenshaw’s (1991) arguments about how the
internal dynamics of terrorist organizations can cause difficulties for the peace
process. He uses ther internal conflicts created by differing levels of ideology within a
terrorist organization trying to make peace to explain the tendency of radical factions
to break off from groups engaged in peace negotiations.
While the level of sophistication in organizational analysis of terrorism has
increased, no one has yet explored the challenges that heterogneity poses for terrorist
support systems and how those challenges affect groups’ ability to kill people.
work begins to address this problem by focusing on the dynamics of the relationship
between terrorist leaders and the middlemen they must use for security reasons.
Beyond contributing to a growing body of literature on the organizational dynamics of
terrorist groups, our analysis has implications for important policy debates. In
particular, our model speaks to the treatment of possible informers, to the
interpretation of the apparent success or failure of counter-terror policies, and to
debates about whether terrorist funds should be seized or tracked for intelligence
value. Specifically, our analysis suggests that seizing funds, and thereby tightening
terrorists’ budget constraints, can increase the frictions within organizations to the
point where leaders choose to spend their money on activities other than attacks.
The remainder of the paper proceeds as follows. Section (2) provides the
empirical and theoretical motivation for our model of a hierarchical terrorist group.
Section (3) formally presents the model. Section (4) develops the equilibrium
5
Convention