Self-managing Terror

Peter Schram (Vanderbilt University)

Abstract: I examine a principal-agents model of subversion with externalities and identify a novel explanation for how diversity can be valuable to organizations: teams of diverse agents will at times self-manage their agency problems. Generally, this model explores how and when integrating fringe or ideologically extreme agents can align incentives between the principal and teams of agents. This technique is shown to function better relative to other contracting techniques in settings that are bureaucratic and low-information. Self-managing teams are explored in the context of Islamist terror groups that use foreign fighters. Because foreign and domestic fighters have conflicting preferences over what types of activities the group should be conducting, if foreign and domestic are integrated onto a team, then the team may self-regulate with efficiency gains for the principal. This model explains variation in agency problems and foreign fighter usage in major insurgent groups, including al Qaeda in Iraq, the Haqqani Network, and the Islamic State.

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