Terrorist finance is the culprit behind the success of terror activities. Terrorist activities rely heavily on financial operations to operate successfully similar to fiscally stable states. This study examines the political economy of terrorist financing by looking into the relationship between terrorism and its underlying financial structure. Terrorist finance exists in three forms: as a completely separate structure from terrorist organizations, as a subsidiary structure or as a dependent structure. Independent financing methods usually are front businesses or individual donors who support terrorist organizations with clean money. Subsidiary structures are charities which have a symbiotic existence with terrorists and dependent structures are criminal activities promoted or protected by terrorists. This framework explains the success of several terror organizations in implementing their activities and possible solutions to the problem. The research concludes that terrorist financing and terrorist organizations are not necessarily one and the same and that their close operation is an important factor in their success. Governments need to pay particular attention to this link and its outcomes if counter terror activities are to have some modicum of success.