Despite the fact that much of recent terror is ethnically based, little attention has been paid to systematically explaining ethnic violence. We build on the work done by the Minorities at Risk Project (MAR) to the issue of ethnic terror using systems dynamics. While there has been important work done using MAR to explore ethnic violence as a base using statistics and qualitative analysis (Gurr 2000) there has been little work exploring ethnic terrorism specifically and none that has exploited systems dynamics as an analytical tool. The application of a systems dynamics approach will help us go beyond some of the limitations of statistical analysis to explore how government policy and ethnonationalist terrorism feed of each other in a cycle of violence, discrimination and repression. This work has three broad goals. First, it is targeted at understanding the causes of ethnic terror and second examining the way the relation between the ethnic policies of governments and the behavior of ethnic groups - particularly their choice to use or not use terrorism relate systematically. Third, this work sees to apply for the first time the tools of systems dynamics to political violence.