This study, political violence mainly refers to terrorism-related incidents and activities. Terrorism around the world is on the rise despite government efforts and spending on counter terrorism. The aim of this study is to examine the inverse relationship between terrorism and economic growth. This study is to examine the inverse relationship between terrorism and economic growth in 31 countries. To do this, a simultaneous equation model was applied to panel data for a sample of 31 countries (18 developing and 13 developed) during the period 2002-2022.The results of this study show the following: For developed countries, economic growth has no significant impact on terrorism; Urban population, poverty rate and previous terrorist acts have positive and significant effects on terrorism in the case of developed countries; We also note that unemployment and the Gini index do not have a significant impact because in these countries the unemployment rate and the social inequality index are practically low in the case of developed countries; For the case of developing countries a negative effect of economic growth on terrorism; Unemployment, poverty and gini index significantly and positively effect terrorism in the case of developing countries.Applications of this study: This study can be useful for policymakers in designing effective security and economic strategies to mitigate the adverse effects of terrorism. They also help improve the investment climate and promote economic stability. Furthermore, researchers can use these results as a basis for future studies on terrorism and development.This study’s main contribution lies in providing a more comprehensive analysis of terrorism by integrating economic, social, and political factors within a single framework. The research also identifies the most influential determinants of terrorism and highlights the interactions among these factors, offering valuable insights for policymakers and researchers.