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Conventional wisdom suggests that dissident groups use terrorism when they face an overwhelmingly more powerful state, yet attacks in developing countries have predominated in the post-Cold War era, suggesting that terrorism is an increasingly weak state phenomenon. Cross-national studies of terrorism find mixed results for how common measures of state capacity influence terrorism. We argue that these indeterminate findings are due in part to a partial understanding of both what constitutes state capacity and how different aspects of state strength or weakness relate to the propensity of groups to use terrorism. We decompose state capacity into two dimensions that we theorize are particularly relevant to dissident groups: military capacity, or the ability to project conventional military force, and bureaucratic/administrative capacity. Our analysis supports the claim that terrorist attacks are more frequently targeted …