The Wall Street Journal had an article while I was gone where Princeton economist Alan Krueger contends that the seeds of terrorism do not grow in poverty but in the lack of civil liberties.
Like Hernando De Soto's Mystery of Capitalism, there are some head turning ideas in here. For starters, the 9/11 attackers and the latest British terrorists weren't poor or from poor backgrounds. Nor is poverty evident in many other terrorist's backgrounds. There also doesn't seem to be statistical evidence that terrorism increases during economic downturns.
There does seem to be a link between between terrorists and countries marked by political oppression.
My take? Poverty without hope leads to protests and unrest. Oppressive governments naturally stifle unrest which can lead to revolution. As a buffer against revolution, many of these governments channel their citizen's unrest toward the west, using the U.S. in particular as a convenient scapegoat, when it is their own policies that diminish hope. Effectively they say, "It's not our fault you're poor, it's the west. If you protest us, we'll put you in jail. If you protest the U.S., you'll make the news."
The point continues to be, if you gave people a choice where would they go? The answer is almost always opportunity and opportunity flourishes with democracy.