Laurence R. Iannaccone describes The Market for Martyrs in this interesting PDF from George Mason University.
It looks at religious violence and militant groups from an economic perspective–there are “terrorist firms” supplying some good to an demanding consumer base:
Injury-oriented sacrifice can be modeled as a market phenomenon grounded in exchanges between a relatively small supply of people willing to sacrifice themselves and a relatively large number of “demanders” who benefit from the sacrificers’ acts. Contrary to popular perception, it is on account of limited demand rather than limited supply that markets for “martyrs” so rarely flourish. Suicidal attacks almost never profit the groups best equipped to recruit, train, and direct the potential martyrs.
He touches on the many interesting costs and difficult risks of running of a terrorism business:
In contrast to legitimate businesses, terrorist firms face the threat of capture, imprisonment, or execution. This does much more than merely raise costs; it forces the firm to adopt internal structures that are larger, more complex, and more vertically integrated than would otherwise be efficient. The terrorist firm incurs high “transaction costs” when working with other firms or the general market. To avoid detection, the firm must conduct its market transactions through complex, covert, and costly channels. This is, of course, especially true when seeking specialized inputs such as explosive devices or military hardware. Subcontracting is similarly costly insofar as it raises the risk of detection through covert surveillance, intercepted communications, betrayal, or capture of the subcontractor. Vertical integration minimizes these external costs, but does so at the cost of larger and more costly internal forms of organization, including division of the firm into many different sub-units. The proliferation of subunits is especially pronounced for terrorist and revolutionary organizations, which face such grave risks from defection or discovery, that they typically divide themselves into numerous small cells (which also help to reduce free-riding).
I found this quote to be intriguing as well, if only for its delicate skirting around saying what needs to be said:
Who pays? Even if all other problems can be solved, the terrorist firm may have no effective way to “sell” its product. Although no one cares to call suicide attacks a “public good,” the consequences are public in the sense of being non-excludable and nonrival. Hence even if many people attach great value to the attacks, each individual person will have no incentive to pay for the product either before or after the fact. Standard economics solutions are largely out of the question, because they require collective action that virtually guarantees detection by authorities.
And finally, something that seems incredibly important:
Lost in most studies of religious militancy is a crucial fact: religious extremism almost never leads to violence. Thousands of “sects” and “cults” flourish in every region of the world and every religious tradition. Their deviant beliefs and behavior cover every conceivable aspect of life and many demand astonishing levels of commitment and obedience. Yet very few turn to crime, fewer still embrace violence, and virtually none encourage murder or suicide. Inevitably, the exceptions receive tremendous attention in the news, research literature, and popular consciousness; but this is precisely because they are so exceptional. To put the numbers in perspective, consider that the United States in home to several thousand religious organizations (Melton 1991; Melton 1986) but in the past two generations only two religious leaders have ordered killings: Jim Jones of the People’s Temple and David Koresh of the Branch Davidians. 30 And only two groups have embraced suicide: the People’s Temple and Heaven’s Gate. The remaining 99.9% of religious groups (who probably account for 99.99% of actual members) are guilty of doing nothing even remotely similar. 31 Keeping this fact in mind is exceedingly difficult, when books on fundamentalism routinely carry titles like Terror in the Mind of God (Juergensmeyer 2001) or The Battle for God (Armstrong 2001).