Determining the ideological orientation of terrorist organisations: the effects of government repression and organised crime

The paper develops a model about the coalition between terrorism and crime. An organisation can get funded by a benefactor which enables focusing on terrorist objectives, or funded by criminal mercenaries which decrease the terrorist organisation's ideological purity. We show how a balance is struck between these two concerns. We support empirically the two hypotheses that terrorist organisations' ideological orientation depends positively on steady funding by a benefactor and on the government's ability to impose sanctions on their activities. Otherwise terrorist organisations transform into criminal organisations. A terrorist organisation altruistically provides public goods for the community. A criminal organisation, however, provides private goods for itself. We offer examples of organisations retaining their terrorist ideology, and organisations transforming into criminal organisations.