This study evaluates the relationship between democracy and the decisi
on calculus of terrorist organizations. Starting with a simple formali
zation of the budget constraint for terrorist organizations, this proj
ect evaluates two schools of thought regarding the role of democracy.
The first school, labeled the strategic school, argues that democratic
regimes decrease the price of violence and therefore encourage terror
ism. The second school, labeled the political access school, argues th
at democratic regimes decrease the price of non-violent political expr
ession and thereby decrease the probability of terrorism. These compet
ing explanations are evaluated against the ITERATE cross-national time
series data for the years 1968 to 1986, using a negative binomial reg
ression event count model. The results show that established democraci
es are less likely to experience terrorism than non-democracies, but t
hat newly formed democracies are more likely to experience terrorism t
han other types of states.