Whu do Muslims Support Hawala and Charity Operations that Support Jihad?

A new article on SSRN attempts to address the question: why do individuals support the work of charities that support jihadist operations, even when they may not agree with these organizations' agenda? The paper, entitled "Microfinancing Terrorism: A Study in Al Qaeda Financing Strategy", by Tolga Koker and Carlos Yordan (my thesis adviser while at Hamilton College), asserts that social pressure--rather than ideology--motivates individuals to donate to charities that may be affiliated with the global jihadist movement.

To test this claim, the authors construct a social choice model, where individuals derive different utilities from their private preferences (to support a jihadist movement) versus their public preferences (community reputation). The authors conclude that because Middle Eastern cultures value the collective over the individual, people will eventually acquiesce to social pressure and donate to these charities because the utility gained through group participation outweighs that from individuality.

This a provocative argument, as it suggests there may be an endless supply of financing to jihadist groups like al-Qaeda, as Muslim may always submit to social pressure and contribute funds. While there is much value in examining the social dynamics within Muslim culture that lead to the "microfinancing of terrorism",

I am not convinced that the dynamic presented by the authors is what actually provides the bulk of support for these illicit financial networks. More likely, these groups are simply exploiting the global hawala system to laundering and redirect funds.

The Center for Contemporary Conflict has presented excellent work discussing how jihadist groups exploit hawla, and more recent studies have shown this network to be extremely efficient at moving money around the world.

This exploitation can occur completely outside the purview of the individuals using the system, which would conflict with the idea that social pressure is motivating direct financing of these groups.

Put simply, many Muslims can be supporting groups like al-Qaeda without even knowing it.

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