THE WANE OF COMMAND:Evidence on drone strikes and principal-agent dynamics in terrorist organizations

This paper investigates how the behaviour of terrorist organizations changes if counterterrorism directly targets their structures of internal control. Empirical evidence from other violent organizations and game-theoretical models suggest this has an ambiguous, but potentially positive, effect on the amount of violence groups commit, through aggravating within-group principal-agent problems. The paper exploits a natural experiment provided by strikes by Unmanned Aerial Vehicles (drones) ‘hitting’ and ‘missing’ terrorist leaders in Pakistan. Results indicate that a drone ‘hit’ on a group’s leader is associated with an increase in terrorist violence by this group by 29 attacks (43%) globally in the six months after the strike, compared to a drone ‘miss’. Additional analysis of heterogenous effects across groups, and the impact of drone strikes on the timing, type and target of attacks, attacks by affiliated terrorist groups and group splintering indicates that within-group principal-agent dynamics explain these results better than alternative theoretical models.