ABSTRACT
The presence of two state sponsors in South Asia has contributed to the terrorist threat, exacerbated conflicts, and even brought countries to the brink of war. The Pakistani government and the Afghan Taliban regime have both supported an array of militant groups since their respective inceptions. Principal-agent theory, part of the rational choice approach in international relations, has been the dominant theory to explain the motives, benefits, and costs of state sponsorship of militant groups. The theory persuasively explains the Pakistani government's behavior, but it falls short in fully illuminating the Taliban's calculus. Despite incurring substantial costs, neither government is likely to abandon its relationships with militant organizations in the future.
