What factors influence with the way in which particular countries at specific times respond to the threat of terrorism? This dissertation shows that the answer for this question is more multifaceted than the literature on state counterterrorist policies often suggests. Many scholars of terrorism follow an (often implicit) assumption that when faced with the threat of terrorism governments simply do everything they can to minimize this threat, and therefore, that declared counterterrorist policies are directed first and foremost at preventing future terrorist acts. This instrumental rational-action logic is especially dominant in the public domain, and in the rhetoric of politicians, lawyers, and the mainstream media.This thesis systematically analyzes the relationship between oppositional terrorism and state policies, using pooled time-series cross-sectional regression analyses of large-scale cross-national databases (some of which were collected especially for the current study). It examines the impact of terrorism and other important factors on state policies as well as the effects of these policies on subsequent levels of terrorism. The results demonstrate that states often fail to follow the instrumental rational-action logic postulated by most observers, in which counterterrorism policies are directly responsive to internal terrorist actions and/or successfully deter or reduce subsequent terrorism. Instead, and consistent with the logic of socio-institutional and cultural theoretical approaches, the most consistent predictors of state counterterrorist policies were spatial diffusion (i.e. the adoption of similar policies by neighboring states), cultural traditions (most notably a democratic tradition), and the existence of various domestic threats (notably non-violent internal dissent). Furthermore, the results show that the common counterterrorist policies examined in this study (many of them violent in nature) were not effective in reducing future terrorism. In fact, many of them only exacerbated the situation and produced higher levels of terrorism. Thus, this study takes an important step toward a better understanding of state policies and their formation, providing policy makers with important findings about counterterrorist policies and their effectiveness.