Terrorism is Not Necessarily Caused by Poverty

Freedom squelches terrorist violence by Alvin Powell cites research by Associate Professor of Public Policy Alberto Abadie (from Spain's Basque region, but I'm not sure he's a Basque):

Before analyzing the data, Abadie believed it was a reasonable assumption that terrorism has its roots in poverty, especially since studies have linked civil war to economic factors. However, once the data was corrected for the influence of other factors studied, Abadie said he found no significant relationship between a nation's wealth and the level of terrorism it experiences.

"In the past, we heard people refer to the strong link between terrorism and poverty, but in fact when you look at the data, it's not there. This is true not only for events of international terrorism, as previous studies have shown, but perhaps more surprisingly also for the overall level of terrorism, both of domestic and of foreign origin," Abadie said.

Instead, Abadie detected a peculiar relationship between the levels of political freedom a nation affords and the severity of terrorism. Though terrorism declined among nations with high levels of political freedom, it was the intermediate nations that seemed most vulnerable.

Like those with much political freedom, nations at the other extreme - with tightly controlled autocratic governments - also experienced low levels of terrorism.