Does unemployment drive insurgency? That's a big question that hasn't been studied much. Despite the lack of data, unfounded assumptions abound. These assumptions are the basis of grand strategic theories to multi-billion $$ counter-insurgency programs (such is the intellectual poverty of US military thinking). One interesting statistical study, Do Working Men Rebel by Eli Berman, Joseph Felter, and Jacob Shapiro (NBER), attempts to answer this question (November 2009).
They conclude that unemployment is actually negatively correlated to insurgency. They posit that the most likely explanation for this is that the government's counter-insurgency efforts are cheaper/easier to accomplish, since they can buy intel on insurgent locations more easily. The other (less likely) potential conclusion is that high unemployment is an artifact of successful counter-insurgency efforts that restrict movement and increase isolation. In either case, the idea that opportunity costs etc. (the standard theories regarding unemployment and insurgency) drives insurgency doesn't appear to be valid. Another ancillary conclusion of the paper is that high unemployment typically forces a shift in tactics towards stealth area of effect attacks (IEDs, and other methods that connote relative weakness rather than strength) that produce high levels of collateral damage.
The theoretical implications for insurgency are:
- If the loss of standard jobs are replaced by jobs/wealth derived from black market economies the insurgency is less likely to break down. The wealth derived from these sources keeps the costs of obtaining information high. We see this in Mexico and Afghanistan.
- The ability of the insurgency to provide basic services (food, energy, and shelter) blocks government/corporate efforts to force information transfer using the same method. This is particularly true if isolation is induced. So, if insurgents promote self-sufficiency or generously support charity services offered by NGOs are less vulnerable.
- Counter-insurgency theory already promotes the disruption of systems through checkpoints, walls, etc. to weaken insurgencies. As governments become less wealthy/weaker due to globalization or more removed from the threat, we are likely to see much more counter-insurgency lite: where the government avoids expensive or untenable checkpoints/walls/occupation and instead denies access to critical infrastructure, ala systems disruption, to create the same effect. Israel is already using this.
NOTE: an insurgency coupled with alternative wealth production (black globalization or resilient communities) gains not only protection against encroachment but the funding, processes, technologies, and motivation required for more sophisticated or aggressive attacks/defense.